Thursday, February 07, 2013

Prom note deal very positive step forward for Irish people

Fine Gael Meath East TD, Regina Doherty, has today (Thursday) welcomed the deal struck by the Government on the Anglo promissory notes, saying it is a hugely positive step forward for the Irish economy and the Irish people. Deputy Doherty added the deal would significantly ease the debt burden at a time when the Irish economy is trying to recover.

“The deal announced today by the Taoiseach in the Dáil is a very important step forward. By liquidating IBRC, formerly Anglo Irish Bank, and replacing the promissory notes with bonds, we have essentially swapped a high cost, short-term loan, with a long-term, interest only mortgage. Over the next decade, the Government will have to borrow €20 billion less, thanks to this deal. On top of this, it will have a positive impact on the Budget for next year, which means there will be fewer new taxes and spending cuts.


“I have been amazed by the way in which Sinn Féin representatives have tried to misrepresent this deal, attempting to dampen down the positive impact it will have on the Irish economy. It is true that we won’t have to pay any of the actual debt until for another 25 years, in 2038. The final payment will be made in 2053. And over those years, inflation and economic growth will greatly reduce the value of the debt.

“The Finance Minister has explained what the deal means by way of an anecdote; he paid about £3,000 for his house in Limerick in the late 1960s. At the end of his mortgage, 25 years later, one month’s pay check would have paid for his entire house. By stretching the debt out over such a long period, we are greatly diminishing its value.

“As well as cutting our borrowing requirements by €20 billion and allowing us to introduce fewer taxes and spending cuts in the years ahead, this deal also gives a significant boost to Ireland’s prospects for economic growth. It should make it easier for Ireland to get back into the markets, a key step in our economic recovery.

“This deal is one essential element of the Government’s plan to improve the disastrous bail-out deal we inherited from the Fianna Fáil. Today, the Government has delivered a vast improvement to that deal. The toxic financial, political and social legacy left by the previous government has now finally been dealt with. We have finally closed the chapter on Anglo Irish Bank, and the infamous promissory notes are no more. I would like to pay tribute to Minister Noonan for his tireless work in these negotiations. He has truly delivered for the Irish people.

“There is still an awful lot of work to do. Today we have dealt with the €31 billion promissory notes. Now, work will continue apace on delivering a further deal on breaking the link between banking and sovereign debt, as we continue to bring about savings for the Irish taxpayer.”

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