Ireland sits on a pile of debt bigger than the 2000s

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Police officers on the site where supporters clashed with bailiffs and riot police at Dale Farm illegal travellers site at Cray's Hill, near Basildon, Essex, Britain, 19 October 2011. British police launched a controversial operation 19 October to evict several hundred people from an illegal travellers site on a farm in south-east England, following a 10-year legal battle. Dale Farm, the largest travellers site in Britain, first became home to Irish travellers in the 1960s. But a long drawn-out legal dispute began when the traveller families set up pitches illegally on green land. The Irish travellers, who are not gypsies, have a nomadic lifestyle and settled on 51 illegal plots at Dale Farm in the 1970s.

Ireland sits on a pile of debt bigger than the 2000s


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Ireland sits on a €205bn “mountain of debt” that is four times bigger than it was in the 2000s, the Chief Executive of the National Treasury Management Agency (NTMA) Conor O’Kelly told a parliamentary committee on Thursday.

O’Kelly told the Public Accounts Committee that Ireland has paid €33bn in interest over the last five years and €60bn over the last decade to service interest on sovereign debt. In sum, the country is not in a good place. Structurally, O’Kelly pointed to the fact that Ireland depends on foreign capital to cover 90% of its borrowing needs, which makes the country more vulnerable to international capital fluctuations.

According to O’ Kelly, Ireland’s debt-to-Government revenue stands at 251%, which is one of the highest in Europe. That is different from the debt-to-GDP ratio indicator frequently quoted but suggests how far are countries prepared to address volatility. “Ireland is not in a good position from a debt point of view,” O’Kelly said.

O’Kelly hailed Christine Lagarde’s appointment as President of the ECB, as this comes with the expectation of a low-interest-rate environment that allows Ireland to service its debt. Low-interest rates have reduced the debt-servicing burden from €7.5bn to €4.5bn a year, an improvement that was all down to monetary policy.

Addressing a question by Sinn Féin MP David Cullinane, O’Kelly admitted that ineptness was linked to the need to recapitalize the Irish banks following the crash (€60bn) although he expected a return on that expenditure to the tune of €30bn.

Mr O’Kelly has projected a 100% chance of recession, especially in the event of a hard Brexit, but also due to a downward cycle, admitting that Ireland may now be more vulnerable than in 2008 when the state owed only €40bn.

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