The Deputy should be aware that the data contained in this response, which has been supplied by the National Treasury Management Agency (NTMA), relates to the outstanding level of National debt. At end-February 2012, it stood at €121.2 billion, as shown in the table below. National debt is essentially the debt of the Exchequer and is a subset of General Government debt which is the measure of the total debt of the State used for comparative purposes across the European Union. In addition to the National debt, General Government debt also includes the debt of central and local government bodies and other entities classified within Government as well as the Promissory Notes issued to a number of financial institutions as a means of providing State support to these institutions. General Government debt is reported on a gross basis and does not allow for the netting off of outstanding cash balances whereas the National debt is a net measure which does. Figures in relation to the outstanding level of General Government debt at end-2011 are presently being compiled by my Department in the context of the submission of the Maastricht Statistical Returns to Eurostat at the end of March. These Returns will then be published on my Department's website in mid-April.
Maturity Profile of National Debt at 29 February 2012 (€ million)
Year
|
Irish Government Bonds
|
Other Medium and Long Term Debt
|
IMF/EU and Bilateral Facilities
|
Short Term Debt
|
Cash and Other Assets
|
State Savings
|
Total
|
2012
|
5,563
|
5
|
1,466
|
4,833
|
(23,070)
|
1,180
|
(10,023)
|
2013
|
6,028
|
0
|
0
|
3
|
0
|
1,180
|
7,211
|
2014
|
8,327
|
0
|
24
|
0
|
0
|
1,180
|
9,532
|
2015
|
3,537
|
66
|
6,901
|
0
|
0
|
1,180
|
11,684
|
2016
|
10,308
|
0
|
6,035
|
0
|
0
|
1,180
|
17,524
|
2017
|
0
|
0
|
2,624
|
0
|
0
|
5,902
|
8,526
|
2018
|
9,256
|
0
|
6,524
|
0
|
0
|
0
|
15,780
|
2019
|
14,467
|
0
|
3,580
|
0
|
0
|
0
|
18,047
|
2020
|
19,567
|
0
|
2,624
|
0
|
0
|
0
|
22,191
|
2021
|
0
|
0
|
5,024
|
0
|
0
|
0
|
5,024
|
2022
|
0
|
0
|
3,269
|
0
|
0
|
0
|
3,269
|
2023
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
2024
|
0
|
217
|
0
|
0
|
0
|
0
|
217
|
2025
|
8,284
|
0
|
0
|
0
|
0
|
0
|
8,284
|
2026
|
0
|
0
|
2,000
|
0
|
0
|
0
|
2,000
|
2027
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
2028
|
0
|
230
|
0
|
0
|
0
|
0
|
230
|
2029
|
0
|
50
|
0
|
0
|
0
|
0
|
50
|
2030
|
0
|
105
|
0
|
0
|
0
|
0
|
105
|
2042
|
0
|
0
|
1,500
|
0
|
0
|
0
|
1,500
|
|
85,337
|
673
|
41,573
|
4,836
|
(23,070)
|
11,803
|
121,151
|
Source: NTMA.
Rounding may affect the totals.
*Notes to the Table:
1. It should be noted that the figures in the table are unaudited figures and include the effect of currency hedging transactions.
2. It is assumed for the State Savings products included in the National debt (Savings Bonds, Savings Certificates, National Instalment Savings, National Solidarity Bonds and Prize Bonds) that 10 per cent of the total outstanding at the beginning of the period matures each year for the next five years with the final 50 per cent maturing in the sixth year.
3. State Savings also include moneys invested by depositors in the Post Office Savings Bank (POSB). These funds are mainly lent to the Exchequer as short term advances. Taking into account the POSB, total State Savings outstanding are €14.3 billion.
4. Short-term funding of €1.5 billion under the EU/IMF Programme maturing in 2012 is due to be replaced by longer term funding.
The figures in the table above relate to the National debt as of 29 February 2012, broken down by year of maturity. Of the €121.2 billion outstanding, €11.8 billion was borrowed from domestic retail investors in Ireland under the State Savings schemes operated by the NTMA, €41.6 billion was borrowed under the EU/IMF Programme and the balance is mainly Irish Government bonds sold on the international capital markets. Because of the mechanisms by which Government bonds are issued and traded, it is not possible to identify the holders of this portion of the debt.
In relation to banking recapitalisation related debt, the Deputy should be aware that there was no specific tranche of borrowing that was undertaken solely for the purpose of funding payments to banks. Rather, the funds which the State has access to as a result of borrowing undertaken by the Exchequer, are available, along with the funds sourced from revenues such as tax revenue, non-tax revenue and capital receipts, to fund overall expenditure, including the recapitalisation of the banks. It is the case however that in the absence of the requirement to provide capital support to the banks, the Exchequer deficits and therefore the State's borrowing requirement and debt levels would have been lower.
In relation to bank recapitalisation related transactions that were funded from the Exchequer, in 2009 the Exchequer funded a €4 billion capital injection into Anglo Irish Bank. Also, in 2009 there was a frontloading of the 1% of GNP Exchequer contribution to the National Pensions Reserve Fund (NPRF) for 2009 and 2010 to part-fund the recapitalisations of Allied Irish Bank (AIB) and Bank of Ireland (BOI) announced in February 2009. The total sum transferred from the Exchequer to the NPRF in 2009 was €3 billion. Both AIB and BOI were recapitalised by way of a €3.5 billion capital injection in the form of Preference Shares in each institution with all of that capital provided from the NPRF. Generally speaking, transfers from the NPRF do not impact the Exchequer, are not therefore deemed borrowings and do not form part of the National debt.
In 2010, the Exchequer provided €625 million to Educational Building Society (EBS) and €100 million to Irish Nationwide Building Society (INBS) by way of special investment shares. This method of investment gave the State extensive powers and full economic ownership of the two building societies.
During 2010 also, capital injections totalling €30.85 billion were committed to Anglo Irish Bank, INBS and EBS. The respective amounts were €25.3 billion for Anglo Irish Bank, €5.3 billion for INBS and €250 million for EBS. The consideration for the capital injections were Promissory Notes issued by the Exchequer to the institutions in lieu of cash. These notes will be redeemed over a period of several years with the Exchequer committed to making annual repayments of 10% of the initial capital value of the notes. This means the Exchequer did not require upfront cash funding for the capital injection. While the €30.85 billion in Promissory Notes were added in full to the stock of General Government debt from the date they were issued in 2010, they only impact the National debt as the annual instalments are paid. In other words, the National debt was only affected by the Promissory Note payments for the first time in 2011, when the Exchequer provided a combined €3,060 million to Anglo Irish Bank and INBS — now known as Irish Bank Resolution Corporation (IBRC) — and €25 million to EBS.
Finally in relation to 2010, a further €3.7 billion was injected into AIB in return for ordinary shares. This capital was provided from the NPRF and did not therefore impact the National debt.
In July 2011, the Exchequer funded €7,568 million of the payments for the recapitalisation of the banking sector, which followed from the March 2011 PCAR process. €2,700 million was provided to Irish Life & Permanent (ILP) in return for ordinary shares and contingent capital notes,
€985 million to BOI in return for contingent capital notes and €3,883 million to AIB by way of a capital contribution and contingent capital notes. Offsetting this cost somewhat were the €1,018 million in capital receipts transferred to the Exchequer from the NPRF from the sale of part of the State's shareholding in BOI and €46 million in fees related to the recapitalisations. This resulted in a net Exchequer contribution of some €6.5 billion towards the recapitalisation of the banking sector in 2011, thus adding to the National debt. The Budget 2012 Exchequer deficit estimate for 2012 made provision for €1.3 billion in Exchequer funding to complete the recapitalisation of ILP through the acquisition of its life assurance subsidiary, Irish Life, by the State in June 2012.