Joan Burton (Dublin West, Labour)

The overhang of these losses weigh heavily on our country's capacity to source borrowings at reasonable cost. Yesterday the NTMA had another successful bond auction but at a price that must cause ripples of anxiety in the Department of Finance. Mr. Paul Krugman, in an article in The New York Times today, makes exactly the same point and compares our bond rates with those of Spain. The notion that Ireland is taking a huge austerity hit when the underlying fundamentals were weakened by the guarantee in precisely the way Professor Honohan points out is the cause of the continuing large premium which we pay over German bond rates because we have ended up with too much national debt as a consequence of the Fianna Fáil move. That is as simple an analysis I can make.

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