Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

As regards changes in the bond markets and the cost of borrowing, we know that the ECB is going to start unwinding its quantitative easing, QE, programme. We know that we have €57 billion of government debt that has to be refinanced over the next five years. We must be at the bottom of the cycle in terms of interest rates. They cannot go any lower. It has to be real risk for the country. The cost of sovereign debt is going to increase, perhaps significantly. There will be implications for consumers if interest rates rise. Looking at the risk matrix, the stability programme update, SPU, puts it as a low risk - bond market conditions with a medium impact - and the Irish Fiscal Advisory Council, IFAC, commentary broadly concurs with that. It is staring us in the face that the era of zero interest rates cannot continue. History tells us that.

Interest rates are going to go up sooner or later and that is going to have an impact. The Irish Fiscal Advisory Council recently said that a few years ago we projected that by now we would be paying €10 billion per annum to service the national debt, whereas now it is closer to €5 billion. That is a huge swing. Where is this going to go and what will the impact be?