Dáil Éireann Debate, Thursday - 3 October 2013
44. Deputy Joe Higgins asked the Minister for Finance the amount paid in interest on the national debt in the past year; and the amount of that interest due to debt arising from the capitalisation of the banks and other supports given by the State. [41477/13]
View answerThe end September 2013 Exchequer Returns published on 2 October show that interest expenditure on the National Debt was €4,793 million in the first nine months of the year. State support, on a gross basis, for the banking sector has amounted to approximately €64 billion, which includes Exchequer payments, promissory notes in respect of IBRC and EBS, as well as funding from the NPRF. The proceeds of all borrowing as well as revenues including tax and non-tax, and capital receipts are lodged to the Exchequer account to fund general expenditure. In general, no specific tranches of borrowing were undertaken solely for the purpose of recapitalising the banking sector. Therefore, it is not possible to accurately quantify that part of the debt interest bill that relates to the borrowing undertaken to recapitalise the banks.
The Deputy will be aware however that the €3.06 billion Promissory Note instalment due to IBRC at end-March 2012 was settled with a Government bond. The NTMA issued bonds with a nominal value of €3.46 billion in order to meet the payment. The yield on the bonds and, therefore, the effective interest rate on the repayment of the €3.06 billion, was just over 6.8%. In February 2013, the IBRC Promissory Notes were cancelled and replaced with a portfolio of eight floating rate Government bonds for a total amount of €25 billion. The bonds pay interest every six months (June and December) based on the six month Euribor interest rate plus an interest margin which averages 2.63% across the eight issues.
