It is time to come clean about the true nature of Ireland’s debt.
As Damien Kiberd in the Sunday Times recently stated: “We are creating a debt crisis from which Ireland may never recover.”
In his article, he proceeded to set out the total figures of Ireland’s real debt obligations.
He points out that this data is not set out formally by the official economic body in the State (the ESRI) because it only focuses on published national debt liabilities.
However, the nature of the disastrous banks guarantee granted by Fianna Fail in Farmleigh in 2008 means that Irish debt obligations have in effect exploded.
This is the main reason why Ireland Inc. is being shunned by foreign banks: our reliability rating have collapsed.
When you read the schedule below you will realize why the Irish are totally and utterly broke and until politicians address the fundamental issue of default all other talk is nonsense.
To summarise Mr. Kiberd’s findings on total “real debt” (in billions):
1. Ireland’s Foreign Borrowings: 90 90
2. Borrowing over next 4 years: 80 170
3. Bonds guaranteed to NAMA: 40 210
4. Current /Future Bank Bailouts: * 50 260
5. Owed To Irish Central Bank:** 45 305
6. Owed to ECB: ** 130 435
Cost to service this debt at a rate of 5% = 20 Billion Euro Per Annum
Total Annual Taxes Collected In Ireland per Annum = 30 Billion Euro
Thus 66% of all future taxes must be earmarked to fund the “real” debt exposure. This is the true picture of the Irish financial catastrophe.
*Chris Quigely, a financial expert and commentator, can be reached at email@example.com