Tuesday, 10 June 2014

Questions (194)

Michael McGrath


194. Deputy Michael McGrath asked the Minister for Finance the amount of interest expected to be paid in 2014 on the national debt; the amount of that interest which relates to the debt burden associated with rescuing the banks; and if he will make a statement on the matter. [24709/14]

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Written answers (Question to Finance)

The recent Stability Programme Update 2014 projected general government interest payable in 2014 at just under €8 billion.

As I outlined in my response to PQ 23246/14 recently, it is not possible to quantify that part of the debt interest bill that relates to the recapitalisation of the banks. It can only be tentatively estimated.

Of the projected 2014 general government interest bill of just under €8 billion, my Department estimates that circa €1.6 billion relates to rescue operations in the context of the financial crisis, of which around €0.8 billion relates to interest payable on the floating rate Government bonds used to replace the promissory notes in 2013. The Deputy should note that the interest payments on the floating rate bonds contribute significantly to the surplus income of the Central Bank, up to 80% of which is paid to the Central Fund in the following year.