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We will save almost €3 billion on our national debt this year – Hayes

Brian Hayes MEP today, revealing new figures today, showed that Ireland’s debt repayments are being cut rapidly year by year due to prudent debt renegotiation of our national debt repayments.

“The evidence shows that four years ago we were still forecasting high levels of debt repayment costs for 2017 and 2018. The latest figures show that we will be saving almost €3 billion this year on the cost of our national debt compared to previous forecasts. In 2014, it was projected that we would have to pay €8.45 billion to service our national debt this year (2018); the latest figures show that the actual amount will be about €5.6 billion – a saving of well almost €3 billion.

“This shows that our continued renegotiation of our debt repayment terms is still paying off. These savings account for more resources that we can put towards capital spending, tax reductions and spending on services. Last year, Ireland negotiated the early repayment of the last tranche IMF debt from the bailout as well as early repayment of debt from the European Financial Stability Fund (EFSF). These renegotiated debt repayments saved us hundreds of millions.

“The ongoing work of the Department of Finance and the years of steady renegotiation of the terms of our bailout programme, including the Promissory Note deal and the early IMF repayment deal, is paying its dividends.

“In the four years between 2015 and 2018 we will have saved €7.12 billion and that figure is constantly rising.

“But the real driver of our debt interest savings is around the growth of our economy and how we have brought confidence back, dramatically increased employment and made Ireland an attractive investment opportunity. Our borrowing costs are very stable – we are now we are now getting 10-year money at just over 1%.

             Debt Repayment position 2015 – 2018

  2014 Forecast Actual Amount Paid Savings
Debt Repayments 2015 €7.38 billion €6.7 billion €680 million
Debt Repayments 2016 €7.65 billion €6.19 billion €1.46 Billion
Debt Repayments 2017 €8.08 billion €5.9 billion €2.18 Billion
Debt Repayments 2018 €8.45 billion  €5.65 (latest forcast) €2.8 billion
Total €31.56 billion €24.44 billion €7.12 billion

             Source: Department of Finance

“The real issue now is our debt stockpile and how we can reduce that in line with GDP. Our debt to GDP ratio is just above 70% now. EU fiscal rules state that Member States should have a debt to GDP ratio of below 60%. We should target a sustainable level of debt over the medium term. I believe we should commit to reducing our debt-to-GDP ratio to 45% within by 2025. If we maintain a high debt stockpile on our books, we remain vulnerable to interest rate changes and economic shocks, including the impact of Brexit. A proper strategy to use our tax revenues in the best way possible to reduce our debt levels is very much needed. Getting our debt levels in order is so important for our EU and international reputation.”

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