Tommy Broughan (Dublin Bay North, Independent) | Oireachtas source

Earlier we discussed the summer economic statements, but perhaps the biggest challenge facing the country is the massive size of Ireland's national debt and the huge chimney stacks of debt, as they are called, which must be refinanced between 2018 and 2020. The 2016 National Treasury Management Agency, NTMA, annual report and the annual report on public debt in Ireland by the Department of Finance make it clear that the national debt is the elephant in the room of the national finances. At the end of 2016, general Government debt stood at €201 billion, which represents between €42,000 and €46,000 for every man, woman and child in the country. The national debt represented 274% of general Government revenue and was nearly 250% of the national wage bill. By these measures Ireland remains one of the most indebted countries in the world alongside Japan, Portugal and Greece. Indeed, on the new reference point of GNI* our national debt is 100%.

The stacks of debt from the crash years must be refinanced in 2018 to 2020 when five benchmark bonds are due to mature. The total balance outstanding on these bonds is currently more than €42 billion. The majority of the bilateral loans received from the UK, Sweden and Denmark after the crash also mature over the same period, so the total refinancing amount is more than €46 billion. Many economists believe that the huge refinancing in 2018 to 2020 carries terrible risks given the emerging fiscal unknowns in this country. For example, Professor Colm Fitzgerald of the school of mathematics and statistics in University College Dublin, UCD, wants the Government and the NTMA to take immediate action to refinance the €50 billion bonds maturing in the next three years now that bond yields are low but are expected to rise. He and other concerned citizens refer to warnings given in 2006 and 2007 by people such as Professor Morgan Kelly.

Ireland is moving into an era of great uncertainty. Almost every day we are startled by another emerging impact of Brexit, as happened recently with fisheries. The Irish Fiscal Advisory Council, IFAC, has rightly warned of the vulnerability of corporation tax receipts. They now account for 15% of our tax, which is twice the EU average. It is somewhat reminiscent of stamp duties before 2008. Most of all, Professor Fitzgerald and other academic economists are worried about the growing asset price bubble being driven by the quantitative easing, QE, programme of the European Central Bank since March 2015. That programme has been tapered down to €60 billion per month and is expected to end in spring 2018. Quantitative easing is printing money primarily to benefit the wealthy in society, those with bonds and other assets whose prices increase. That leads to bubbles and suffering for ordinary citizens, such as people trying to buy houses. However, the double whammy of QE is that it will be followed, as night follows day, with quantitative tightening, as is happening in the United States, and higher interest rates.

Will the Government encourage or direct the NTMA to refinance those stacks of debt, amounting to more than €46 billion or a quarter of the total debt, as urgently as possible while interest rates are low and given the worrying risks in the external economic environment?

See this speech in context