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WE LIVEBLOGGED ALL the proceedings today as the Central Bank Governor Patrick Honohan addressed the Oireachtas on Committee on Finance, Public Expenditure and Reform on the repayment of the Anglo Irish Bank promissory note.
Honohan was requested to meet the all-party Oireachtas Committee as a matter of “urgent priority” earlier this month, following a vote which the government unexpectedly lost.
The Government is hoping that repayment of the promissory can be delayed until 2025 if it is swapped for long-term government bond. Amongst other things, Honohan was quizzed in public session on possible changes to Budgetary profile in response to such n arrangement and the Constitutional challenge against the payment of the promissory note.
Honohan: ahead of the March 2012 payment the Central Bank has been working on mechanism on the question of the promissory note in order to reach a compromise that is agreeable to Ireland.
Michael McGrath: are we being ambitious enough in what we are seeking to achieve – particularly as the ECB has said it can be more flexible?
McGrath asks what interest rate would apply the proposed government bond, and whether the Governor yet has a sense where these discussions with the ECB taking Ireland.
Honohan: a long term bond is a” major step forward”, as if puts of the need to refinance payments and lowers net cost.
Honohan says that the whole issue needs to be structured in a way that “brings us to a safer place”. Says that discussions were“very much” going in a positive direction.
Honohan on interest rate: We need to look at the underlying economic flows – whether considering a bond or promissory note.
Honohan asked if he has looked into deferring the interest on the setting on the Irish government bond.
Honohan: The promissory note probably an “overly complicated device” for ensuring the solvency of Anglo.
The promissory note is a “a manifestation of the guarantee” – the Government was faced with the decision to pay all of Anglo’s debts immediately or “put in a note”, says Honohan.
Honohan predicts that there will be several more months of discussions because of the objectives of ‘different players involved’.
Pearse Doherty TD asks whether there will be any changes to Budgetary profile either this year or next year.
Doherty asks the Governor how this proposal could increase the country’s debt sustainability, as it has been suggested.
Honohan: In terms of the proposal on this payment – it is important to remember that the value of debt of debt to GDP ratio is only one indicator of sustainability. So, by lengthening the debt,debt sustainability will be improved.
Interestingly, Bloomberg reports that the bond that Ireland would be use in order to repay the first €3.06bn would currently costs us almost 7 per cent in annual interest.
Doherty: What is there to prevent IBRC trading the sovereign bond on the markets?
Honohan: That would be a matter for the Minister for Finance… but I can’t envisage it as a problem.
Kevin Humphreys TD: Can you confirm or deny that the interest on the long term bond is 6.8 per cent?
Honohan: The coupon is 5.4 per cent, but the market yield will depend on the day of the relevant transaction.
Honohan says Humphreys’ questions are all ones he is restricted to answer in public session. Says he will address them privately.
Stephen Donnelly TD asks Honohan what is the projected cash shortfall for this year – ie how much additional money IBRC will need – and about the sustainability of the debt.
Honohan says that the objective of the plan is to eliminate “the cash need” of IBRC by postponing it.
Honohan in response to Donnelly: “The debt position, of course, is calculated… I share your concern that we might get into a situation where we become too optimistic and complacent.”
He adds that making arrangements which prolong the maturity of the promissory note will put us in “a safe position.”
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RIP,another family’s heartbreak this evening :(
RIP
I hope it’s not James it would be such a waste of a young life.
seriously,how many other bodies are floating around in that river at any one time?
It would be someone else’s waste if life then….
I hate to have say this why are people red thumbing that comment?
So sad news, I know body isn’t identified yet, thoughts with family at such a sad time, too young to die
What are the thumbs down about? I can’t see any contentious statements above!
Richard just ignore the red thumbs on this story We all try too it is such a sad story for the Family who have to deal with this R.I.P and thought for the family
Oh no… :-/
I hope it not James for hisfamly
Thumbs down because any loss of life is sad whatever the age.
I agree Laura but I thought the idea of the thumbs was to make a statement about the comment. Apologies if I have misunderstood.
you havent mis understood at all,the thumbs system is indeed to indicate ones aggreement/disaggreement with a comment..people will thumbs down anything said on this site,no matter what it is
well done to the boyne river rescue….a grim task indeed. my condolences to the family and friends of the deceased.
at least who ever it is has been.found. not in the way any family Will ever hope for but it Will be at least some peace for them. what a heartbreaking time for all concerned. rip.
Dont worry I seen the red thumb record here 1097 so I wouldnt take it personal sometimes with the iPhone or smart (not so Smart) when scrolling down page sometimes ppl hit off it by error I know I for one have .
R I P . Condolences to the family of the deceased .
RIP to this poor soul, it’s someone’s son, brother etc. May his family gain the strength they will need to get them through the next week. how gives a flying f%@k about red thumbers. They are irrelevant. Trolls will be trolls.
at least who ever it is has been.found. not in the way any family Will ever hope for but it Will be at least some peace for them. what a heartbreaking time for all concerned. rip.
Very sad that someone’s son has be taken out of the river
As for the red thumbs why won’t the journal get rid of this red / green
Thumbs crap
People are saying ” I hope it’s not James” . It’s somebody, and someone’s son!! Whoever it is are facing devastation.. I hope it’s not James just pushes the reality to some other poor family
am I right that the body found was that poor boy James,tragic,his life taken so young,only making his way in the world god be good to him
Why was my comment deleted?
Because the journal is like that … Very picky in my opinion and just a tad conservative … It likes to think it’s an important broadsheet , but it’s not really that far removed from most Red-Tops!! Shrude and moronic!!
have your say