Joe Higgins (Dublin West, Socialist Party)
Link to this: Individually | In context

Question 68: To ask the Minister for Finance if he will estimate the total national debt in euros as a percentage of gross domestic product by the year end of 2011, 2012, 2013, 2014 and 2015 and delineate the portion of each figure that can be attributed to the recapitalisation of the country's banks and the portion that can be attributed to interest payments due by the State. [34292/11]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context

National debt is essentially the debt of the Exchequer. There is a second, wider measure of debt which is General Government debt. This is the standard measure of gross indebtedness used for comparative purposes within the EU. It includes the National debt as well as Local Government debt, Promissory Notes and some other minor liabilities of Government. Unlike National debt, it is a gross measure which does not allow for the offsetting of cash balances. Based on the Exchequer deficits as per the recently published Medium-Term Fiscal Statement (MTFS), National debt is projected to increase to stand at approximately €120 billion by the end of 2011 and to reach some €168 billion by the end of the current forecast period in 2015. The National debt forecasts, in both nominal euro amounts and as a percentage of GDP are set out in the table below. For the Deputy's information, the table also shows the forecasts for cash debt interest expenditure and the forecasts for Exchequer banking related payments in each of the years 2011 – 2015.

It is not possible to definitively delineate the estimate of the National debt that can be attributed to particular items of expenditure. However, it is estimated that, by the end of 2010, the cumulative impact on the National debt arising from Exchequer funded banking related payments was just less than €5 billion. This was the result of a €4 billion cash injection into Anglo Irish Bank in 2009 and €0.7 billion in cash payments for special investment shares in INBS and EBS in 2010. National debt at end-2010 stood at €93.4 billion.

The Deputy will also be aware that some €31 billion has been committed in the form of Promissory Notes. While this full amount was accounted for as part of General Government debt in 2010, the National debt is impacted on a phased basis from 2011 onwards as the Exchequer makes the annual payments of 10 per cent of the initial capital value of the Notes or €3.1 billion. The first Exchequer payment was made earlier this year and payments will continue on an annual basis until the full value of the Notes, including interest, has been paid.

Also, in 2011, the Exchequer has provided a net €6.5 billion in the context of the recapitalisation of the banking sector announced in July.

Some €21 billion has also been allocated by the National Pensions Reserve (NPRF) to directed investments in the Irish banks. This does not impact on the National debt measure.