Written answers

Tuesday, 27 September 2011

Department of Finance

General Government Debt

9:00 pm

Photo of Pearse DohertyPearse Doherty (Donegal South West, Sinn Fein)
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Question 121: To ask the Minister for Finance the total Government debt in monetary terms, as a percentage of GDP and as a percentage of GNP for 2007, 2008, 2009, 2010 and 2011; if he will provide a breakdown of these figures in both monetary and percentage terms detailing the portion of the debt attributable to public expenditure and the portion attributable to spending on banks such as recapitalisation and servicing the Anglo Irish Bank and Irish Nationwide Building Society promissory note; and if he will make a statement on the matter. [26030/11]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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The Deputy should be aware that the funds which become available to the State as a result of borrowing undertaken by the Exchequer are not generally assigned to one particular area of expenditure. Rather they are available, along with the funds sourced from revenues such as tax revenue, non-tax revenue and capital receipts, to fund overall expenditure. The figures for General Government debt for the years 2007-2010 as well as the latest published estimate for 2011 from the April Stability Programme Update (SPU) are set out in the table below. General Government debt is the standard measure used within the EU for comparative purposes. General Government debt is a gross measure and it does not allow for the netting off of cash balances or the value of the assets in the National Pension Reserve Fund.

My department is currently reviewing its macroeconomic and fiscal forecasts in the light of later data. These forecasts, which will include revisions of debt projections, will be published in next month's Pre-Budget Outlook. As such the information in the table for 2011 may be revised. General Government Debt and Measures affecting debt (EUR bn and %) 2007-2010

General Government Debt and Measures affecting debt (€bn and %) 2007-2011
20072008200920102011
1General Government Debt47.479.8104.8148.1173.0
as % of GDP25%44%65%92%109%
as % of GNP29%52%79%115%137%
2Budgetary requirement not related to banking1.612.720.618.015.1
as % of GDP1%7%13%11%10%
as % of GNP1%8%16%14%12%
3arecapitalisation and other direct banking measures4.00.77.6
3bIssue of the promissory note30.90.6
as % of GDP2%20%5%
as % of GNP3%25%6%

Notes on the table

1. GDP and GNP for 2007-2010 are CSO estimates published in the National Income and Expenditure 2010. The GDP and GNP for 2011 are Department of Finance forecasts from the time of the SPU publication in April.

2. At the time of the SPU, it was assumed that Exchequer funding of some EUR10 billion would be required as part of the recapitalisation of the banking sector. The actual figure will be below this estimate, and while not finalised, is likely to be approximately EUR6.5 billion.

The banking measures in the above table comprise all injections into banks which affect the General Government debt. It should be noted however that capital injections that are made from the National Pensions Reserve Fund (NPRF) do not affect the debt and are not included in this note. (In 2009 there was a frontloading of the 1% of GNP Exchequer contribution to the NPRF for 2009 and 2010. This was made to part-fund the recapitalisations of Allied Irish Banks and Bank of Ireland in 2010.)

It should also be borne in mind that the fees paid over to the Exchequer from the Bank Guarantee Schemes, which totalled EUR1,333 million and 2010 and EUR599 million so far in 2011 reduces somewhat the debt level in those years.

The full EUR30.85 billion in promissory notes were added to the General Government debt in 2010. The service of the promissory note through the annual cash payment from the Exchequer in the years after 2010 does not affect the General Government debt directly. Interest due on the promissory notes, however, increases the debt and is shown in the table.

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