Tuesday, 21 May 2019

Questions (165, 166, 167)

Pearse Doherty

Question:

165. Deputy Pearse Doherty asked the Minister for Finance the impact on the general Government balance of the transfer of the €2 billion National Asset Management Agency, NAMA, surplus for 2020 to the State. [21664/19]

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Pearse Doherty

Question:

166. Deputy Pearse Doherty asked the Minister for Finance his plans for the €2 billion National Asset Management Agency, NAMA, surplus to be collected in 2020; the way in which he plans to use it; when he plans to use same; the way in which the transfer of funds will be administered; and the location of its transfer. [21665/19]

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Pearse Doherty

Question:

167. Deputy Pearse Doherty asked the Minister for Finance if the anticipated payment of €2 billion from the National Asset Management Agency, NAMA, in 2020 has been factored into the debt projection in the stability programme update; if not, the way in which it would reduce debt as a quantum and a percentage of gross domestic product and gross national income; and if it is fractured in to show the way in which not using it for debt reduction would affect the debt figures. [21666/19]

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Written answers (Question to Finance)

I propose to take Questions Nos. 165 to 167, inclusive, together.

NAMA was established in December 2009 and its debts of nearly €32 billion represented a substantial contingent liability to the State.

The State recapitalised the domestic banking system at a gross cost of €64 billion, adding around 40 per cent of GDP to national debt.

Total government debt now stands at over €200 billion; this is the equivalent of €42,500 for every person in the State.

As per Eurostat guidance, while the NAMA surplus paid to the Exchequer will have a positive impact on the Exchequer balance it will not impact on the general government balance.

However, such repayment will reduce the Exchequer Borrowing Requirement, decreasing the rate at which debt is incurred by the state. This is taken into account in the projections for public debt published in the Stability Programme Update (SPU) 2019.

The SPU reiterated this Government's commitment to use proceeds from the resolution of the financial crisis, making explicit reference to NAMA, to reduce our stock of debt. This approach forms the cornerstone of the Government's approach to building the resilience of the economy to external shocks, including preparing for the impact of Brexit.