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Time that Ireland saw benefit of lower borrowing costs

7 September 2017

Statement by Joan Burton TD
Spokesperson on Finance, Public Expenditure and Reform, and the Arts

Labour spokesperson on Finance Joan Burton TD has welcomed the move by the Government to repay some of the bailout loans to secure interest savings but cautioned that it was now time that the Irish people saw the benefits from the savings on the national debt.

Deputy Burton said:

"The availability of low interest loans internationally offers a chance to redeem high interest debt and replace it with cheaper loans. The gross debt remains the same but lower service costs means more money for public services. People will remember that when the economy nosedived from late 2007 on the interest rates being charged to Ireland went through the roof and that is one of the key reasons why the Troika had to come into Ireland.

"The Government and the NTMA should always be seeking to lock in lower interest costs on our national debt so I welcome today's move to repay the outstanding portion of IMF loans and the bilateral loans with Denmark and Sweden.

"The Exchequer figures up to August show that €131 million less than budgeted has been spent on interest payments.

"The reality is that multi million euro savings have already been made on the National Debt, and this will add further to it. People should also be aware that the Exchequer is carrying €20 billion in liquid cash and assets.

"It is time the Irish people saw the benefit of these savings.

"These loans are being paid down with the proceeds of AIB share sales that was bailed out from the National Pension Reserve Fund. Those sale proceeds could have been reinvested back in the Ireland Strategic Investment Fund to provide a benefit to the Irish people.

"The NTMA has a proven ability to borrow cheaply, and manage the national debt.

"We should be using those skills now, and the interest savings to deliver the investments we need in housing, health and public transport infrastructure."