The State is currently spending 14 per cent of its tax revenue on servicing the national debt and this will grow to 20 per cent over the coming years, the chief executive of the National Treasury Management Agency (NTMA) told the Dáil Public Accounts Committee today.
Brendan Corrigan said the percentage figure would stabilise at around 20 per cent, and this compared with highs of up to 27 per cent in the period back to 1990.
Mr Corrigan said the national debt was growing by approximately €20 billion a year because of the deficit in the public finances. At the end of last year the national debt was €75.2 billion, having been €37.6 billion at the end of 2007.
In terms of the debt to GDP ratio Ireland, at 64 per cent, was below the euro average in 2009, which was 78 per cent. He expected Ireland’s figure, at 84 per cent in 2010, would be broadly in line with the European average. Today’s reassessment of the Irish debt by Eurostat did not affect the 64 per cent figure.
He told the committee that 95 per cent of the national debt was on fixed interest, at an average rate of about 4.5 per cent. The average duration of its bonds was between five and a half and six years.
Asked by Róisín Shorthall of the Labour Party about the National Asset Management Agency (Nama), he said he had “no reason to believe that it will not be self financing”.
On the issue of whether staff working for Nama, which is part of the NTMA, might include people who had partaken in the property boom and profited from it, and then ended up looking after loans they had been associated with, Mr Corrigan said: “Obviously we have to hire people who have the required experience in the property area” and that a balance had to be struck between “the conflicts you mention” and the requirement that people had experience. These conflict of interest issues had to be “managed”, he said.
He said Irish Government debt now had a double A rating, compared with Greek Government debt which is “at or close to junk bond ratings”.
“We were on the pitch last year but we are now happily back in the dressing room,” he said, picking up on an analogy introduced by the Labour Party’s Tommy Broughan, who asked if Ireland would soon be on the pitch in the way Greece was.