Thursday, 12 July 2012

Questions (53)

Michael McGrath

Question:

52 Deputy Michael McGrath asked the Minister for Finance the interest expense associated with the promissory note in 2013 as a percentage of the GDP; and if he will make a statement on the matter. [34142/12]

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Written answers (Question to Minister for Finance)

A series of promissory notes were issued to Anglo Irish Bank and the Irish Nationwide Building Society in 2010 (prior to both of these bodies being amalgamated to form the Irish Banking Resolution Corporation (IBRC)) totalling €30.6 billion. A further €250 million promissory note was issued to the Educational Building Society. When taken together, the outstanding amount on these promissory notes, following scheduled instalments in 2011 and 2012, currently amounts to €25.3 billion. In 2013, total instalments of €3.1 billion are due to be paid to these financial institutions under the State's promissory note obligations. These instalments are made up of both capital repayments and interest.

From a Government accounting perspective, interest is calculated on an accruals basis. In these terms, post-interest holiday, the interest charge for 2013 is €1.9 billion. Based on current forecasts, this represents 1.2% of GDP for 2013.