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MICHAEL NOONAN has given the clearest hint yet that the €1 billion annual saving to the Exchequer arising from the liquidation of IBRC, and the exchange of promissory notes for government bonds, will not be used to ease the burden of the next Budget.
Noonan has said that while he is not willing to begin speculating on the contents of Budget 2014, there remains a “significant gap” between the amount that the government spends each year and the amount it takes in.
“In addition to the requirements to bring our deficit to under 3 per cent of GDP by 2015,” in line with EU requirements, “it makes sense that we bring balance back to the public finances and stabilise and reduce our debt burden,” Noonan said.
He added, however, that there were “other moving parts to be considered” in the compilation of the next Budget such as economic growth and the Exchequer’s tax take, in written responses to Dáil questions from Fianna Fáil’s Michael McGrath.
Though the IBRC liquidation does not result in any particular savings for 2013, as the savings from the promissory note deal are used to fund the one-off costs of winding down IBRC, the interest on the long-term government bonds will cost about €1 billion a year less than the €3.1 billion promissory note repayments.
Labour ministers have called for the reduced costs to be put towards easing the austerity measures required in Budget 2014, which are due to amount to €2 billion in spending cuts and €1.1 billion in new taxes.
The European Commission has previously stated similar desires that Ireland should try to close its budget deficit as quickly as possible, and hinted that it would rather see the €1 billion savings used to bring Ireland back to a balanced budget.
“Market confidence in Ireland’s continued solid fiscal consolidation is essential for the country’s durable return to market financing,” the Commission said in its last report on Ireland’s bailout progress, and added that the implementation of the agreed Budget measures was “essential”.
In response to other questions from McGrath, Noonan said he was confident that the IBRC arrangement was legal within the boundaries of the EU treaties and would not fall foul of any later scrutiny by the European Central Bank.
“The Central Bank of Ireland has carefully examined the legal and financial issues involved in the transactions and is satisfied that there is no such breach,” he said, adding that he was not personally concerned about the possibility.
He also said he had first approached KPMG about the possibility of being appointed as a special liquidator to IBRC back in October, knowing that a possible scheme to eliminate the promissory notes could require the institution’s liquidation.
While it was not possible to carry out a tendering process for the liquidation for reasons of sensitivity, KPMG had been identified as the preferred liquidator based on response submitted to previous tenders sought by NAMA.
He further added that there were no immediate plans to amend the IBRC Act to lift the stay on all court proceedings taken against IBRC, but declined to make any further comment while the courts considered the question of whether they had the discretion to lift any such stay.
Submissions will be heard at the High Court on March 7 to determine whether existing laws give the courts the discretion to lift the stays on matters involving IBRC, including the case taken by the Quinn family challenging the amount it owes the institution, and allow those matters to continue their progression through the courts.
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There is no one billion in “proceeds” from the IRBC liquidation, just less money needed to be borrowed.
this lot are gas
@Reg (and arbitreasure, below): you’re right; I was deliberating about how to describe the benefit and went for the wrong word.
Headline changed now to ‘savings’ which is probably more appropriate.
I wouldn’t worry about it Gavan, it’s all Bilderberg lies anyway ( btw my comment referred to our poxy govt.)
so the bondholders still get paid and we continue to be bled dry. why are we not surprised by continued lies we are spun by this government
Why are the Irish wasters still taking Irish up the jacksie
Fail :-( *still taking IT up the jacksie
Whose debts Michael??
Bank Of Ireland’s?
PTSB’s?
AIB’s?
EBS’s?
March 16th 4pm Dáil Éireann
Ireland says NO to bondholder bailouts.
This is not our debt!
Going
Our Finance Minister seems determined to walk FG and Labour into political oblivion.
On one hand arguments are made that politicians ONLY care about re-election, then the above is asserted.
I think if we’re going to tear limbs off politicians in public online fora such as this one, we should at least be consistent.
Our finance minister will retire on a pension specifically designed with such an end in mind. He can always look forward to giving lectures to the leaders of third world economies on the vagaries of fiscal governance.
Dictators and despots are queuing up as we speak to book some face time with Noonan. They are keen to learn how one might go about defrauding a state of vast amounts of money from their without the military oppression and/or bloodshed of it’s citizens. I’m absolutely sure he will mention something about the Irish being especially docile, somewhat akin to sheep or some other such domesticated pet.
Personally I feel a bestseller is in the pipeline, “How to win friends and seats on the board in Europe whilst defrauding an economy of €100 billion utilizing the combination of a specially designed legislative instrument and subsidized alcohol”.
and the alternative?when the dummies walk off with their loot?
so Mr Noonan, when you said that a deal on the promissory notes would make your arithmetic easier for the budget, what you were really were trying to do was to bluff us once again ???
Nenagh says NO!
Tralee says NO!
Wicklow says NO!
Ballyhea says NO!
Skibbereen says NO!
Killarney says NO!
Ratoath says NO!
Starting to take off now, join in or organise your own.
Lets make them take notice of what we are saying.
Enough is enough.
All those towns voted YES to the stability treaty last year which enshrines the budget rules that Noonan is implementing in the next few budget.
@ Higgins.
Stability treaty? Pal we are still strictly still on the stabilizers.
Enshrines!! Look at the baby blue shirt gloat. Typical young fine garlb member.
Ulster says No!
They will Unite
They will be Rignt!
one point mr. higgins the stability treaty is illegal ! ….
a misinformed public is an illegal electorate ! ….now please be a good little boy and stop pretending to be a man! ..there’s a difference and it’s at a mental level to which I am referring so it’s a moot point and therefore an opinion ….
Jayzus that man has a face like a wet November. Like a muddy puddle dripping off a lurgan spade.
@david- that was “yes for jobs” was it? the one where the results were announced on us tv before the count even began here?
That’s right. Democracy in full feck-the-voters throttle.
Right.
We have been sold into Bondhood. The damage is done. The Promissory Notes were patently illegal. David Hall did not have the required locus standing to bring the challenge but the substance of his legal challenge was well founded.
If we have deflation or nominal inflation, we will have made a millstone to drown future generations.
It’s a political ploy and most people have been suckered by it. A cunning stunt.
no one is, new government next time ???? on recent polls yes, Finna Fail set for a return, climbing the political ratings, does anyone in this country remember?? Water charges 2014 as will need extra revenue then to pay new ministerial pensions (kenny, noonan, all the cabinet)
Off subject a bit, but, have you any thoughts on the case brought to supreme court today by Tom Darcy?
Tom Darcy
A criminal complaint and statement was accepted by An Garda Siochana (Irish Police) against the Allied Irish Bank plc on Valentines Day the 14th of February 2013. This is the first criminal claim levelled against any bank in Ireland for Trading without a perfected Banking Licence, today in the Supreme Court of Ireland the claimant levelled the same charges, our Media ignored what can only be considered as the biggest financial tsunami to hit the global markets. Consider the consequence, your loan, Mortgage, issued by an unlicensed Bank. “Now help yourself, your parents, your friends and tell the world, my email is tdarcy47@gmail.com.I will talk to any confirmed member of media in the world
Esther the problem here in this country is the banks run the courts ,have you not heard the judges are bankrupt.
Just think it might make since if the goverment eased the burden on those of us luckly to have a job, we might be able to spend a little more which in turn may create a few jobs and reduce the amount on the dole and increase the income from tax and vat, which would be a win win for all…..1 Billion would help kick start the economy
That’s a big it may do this and it may do that, it may have little to no affect like all the economists are saying. That it will make no difference really some small benefits. Nothing major it still full speed ahead for austerity budgets. Get a break on paying your taxes this wont change a thing you will pay the same tax and more and more and more because this deal will Not lead to any substantial job creation.
Imagine this we default on illegal PN and we ask for a write down, imagine the effect that would have on the economy.
It pretty simply STOP FALLING FOR GOVERNMENT AND MEDIA SPIN
I’m paraphrasing every govt lackey, minister and ass kisser after the IBRC plan was leaked..
“This is good for Ireland; lets transfer IBRC private debt to long term govt bonds. We can then reduce the impact of subsequent budgets with the savings made from the promissory notes”….
And now, har har, and now it seems this isn’t the case. Sure it wouldn’t be Ireland otherwise! Why bother with this shower.
Avoid your taxes as much as you can, ignore this shower of eejits and let them do whatever they want because your single opinion means jack in Ireland Inc.
Taxes have one main function- paying for Gold plated salaries and pensions. If we have to borrow to do that so be it – there is plenty of kids coming up who will make up the deficit.
Makes sense to pay off national debt, temporary payment wont help gain control of budget, reliving pain this year is short sighted if the pain is still going to come
Shay. You and many others are completely missing the point. The promissory notes deal was illegal, plain and simple. It sounds like, because this crowd of yes men in charge have decided to accept this debt as ours then that makes it ok. We really have to fight with everything we have on this one. The bastards in government are only thinking a couple of years ahead. They couldn’t give a toss about the country’s future.
With the greatest of respect, just f**k off. Anything that can be done to relieve the pressure on the Irish people who, through no fault of their own, are bearing the brunt of debts belonging to failed private banks, should be given at every opportunity. If you think otherwise then you must be fairly well off and not feeling the brunt of this crisis.
Firstly the “Irish people” don’t want an illegal debt passed on to their children
Especially illegal banking debt.
Secondly Michael Taft said on the Vincent brown defaulting in the prom note would have had no effect. I suggest you have a look at it before you go telling people F off.
Ian one way or another the budget has to balance, yes the bank debts may be illegal , I don’t know,
But if I win money tomorrow I will use it pay down my debts , and help me balance my budget ,
Maybe running a country is different to household budgets
But my view makes sense to me
Shay, its 1000 million less for us to borrow at interest. Its not 1000 million euro that we already have already.
* Already have.
Shay we have relieved enough pain…not just our financial burden but Ireland have paid 42% of European debt since 2007. More than any other EU country has. Surely its time to give the Irish taxpayer a break.
Hear hear
Sorry Julie, I don’t understand what you mean. Do you want the Irish people to continue to bear the brunt of this catastrophe or do you want relief for them? I want the latter. So if I hear people like yer man spilling bullshit about paying a debt that isn’t ours and not giving relief to the already shafted Irish people, then if I see fit, I will tell him to f**k off.
Fair enough , then we have to go on strike
You can’t cut your way out of a recession – austerity will not stimulate the economy. Surely using the billion to ease austerity would stimulate enough of the economy to help achieve the deficit targets.
Nahhhh all these twits in FG know how to do is cut cut cut and probably would do the same even in good times to ensure the rich fits
There is no billion. Just one billion less to borrow!
That’s it noonan you paracitical leech, you have stuck the knife in and now you want to twist it.
Don’t worry, Karma will come around.
Am I surprised??? Nope!
Plonkers.
The next budget won’t be earlier, the government are pinning the savings on the croke park agreement to make savings but people in the public service aren’t being fooled! So it will be put on the heads of the lower in society again and when people ask why are the savings made this year not being used to ease the pain of the next budget.. they will simply say it was used to pay back depts, not ease them.
He may shove it up his arse. The people of the land are suffering. In the next 10 months we’ll have water charges, property tax, reduced children’s allowance, increase energy charges, high raise in health insurance and about 1% increase in interest charges. We need to reduce the burden now. Enough is enough, cut the taxes.
Brian they have us right where they want us and to think people will still vote FF FG LAB.
Betcha Noonan got a round of applause from the fat cats at the dinner when he delivered that speech. Whatever happens it wont affect them. The rest of us will pay.
Not the Irish people debt.
When I think of noonan bilderberg comes to mind……not surprised tho if this does go to paying off the debt…considering 20% of revenue is going to pay off debts this year
Sooner Fianna Fail get back in the better
I think I’m going mad. This husky fool was hammered by bertie ten years ago and ridiculed by the whole country. Now this idiot is backed by the very whingey ar$ewipe that opposed him (in party) ten years ago to negotiate a debt that me, you: my little son, your little son, your little daughter, your fine adult son, your fine adult daughter( both gone to Australia) your, please God, grandson, granddaughter, your niece, nephew, will pay back for the light year foteseeable future. All so that a tiny minority of people can have absolutely no financial worries, whatsoever, for the rest of their lives. Nice.
Bit of a nuanced headline there Journal. There is no money, or proceeds, sitting in a pot looking to be distributed.
There will, in a few years time, a smaller amount of money due to be paid out in servicing the debt.
Are you preparing some cosy pictures of Gerry Adam’s having a cup of tea and a scone, or was is this a stand-alone anti-Government article?
The truth hurts you doesn’t it. The article was factual and ub-biased, live with it – we are being stuffed.
un-biased
To be fair, Pat, he had a point. I had been deliberating over what word to use to describe the improvement but obviously ‘proceeds’ isn’t the right one when it doesn’t result in extra income.
I’ve changed the headline now to ‘savings’ which is probably more appropriate..
As the word ‘proceeds’ in the title has now been changed to ‘savings’ I think the Journal acknowledges my point.
Fair play Gavin.
Painful situation the country is in, so I can see why people are annoyed with everything to do with this topic.
In the end of the day the time value of money or N.P.V. of the debt relief is being wilfully ignored in this whole saga. YES we are getting a deal in accountancy terms, no question about that. No question. And the purist ECBankers are not pleased, but that ignores the actual sovereign cost of the arrangement which is way beyond the obligations of a capitalist system which would normally impose losses on risk takers instead of tax payers.
Do they not realise that families are trying to pay back their own loans and can’t afford to pay anyone elses. Enough is enough. They are so egotisical it is unbelievable. But why not they will have fantastic pensions when they eventually go.
Look, The Troika, IMF and ECB are running this country pure and simple. They don’t suggest to Noonan what to do, they order him. He is merely the face of faceless organisations. He had political capital after that promissory note deal and left alone probably would have used it if he could but was probably immediately ordered to continue austerity. I’m not an apologist for him far from it but the people he takes orders from have never let countries recover who don’t obey and never will.
What’s the bet the year of re elections all of a sudden there will be an extra billion or two billion suddenly to get the potholes fixed
No surprise there
Hints? Wasn’t reducing the debt in a slightly less painful manner the whole point of the deal?
@ Nikolas, please quantify. How much was saved? What percentage for NPV purposes are you factoring into account? What will the annual average rate of inflation be until the first date, 2038? What amount has been taken off the public debt? What was the impact on debt to GDP ratio?
Do you assert that the Promissory Notes were legal?
Do you assert that the bond deal is compliant with Article 123 of the TFEU?
In response to My Dawg. On retirement, our finance minister will be paid handsomely to give after dinner speeches in third world just like Bertie Ahern and as we’re giving these despots €638 million a year practically unvouched they obviously think we’re either complete idiots or loaded
Who owed the debt
lies lies and more lies with a government clearly make decisions fuelled by a subsided bar what else can we expect time for another easter rising
@ my dawg there is already a best seller on how to steel a nations wealth is called the shock doctrine by Naomi klien very interesting read about the spread of capitalism and how it has been achieved around the globe
Yes, and it made for very depressing reading. Just figured Noonan might have a hand in an Irish edition on the same concept.
Do the people not get it, noonan and co don’t run this country they do what they are told by troika etc
What an utter moron.
I cannot fathom the mentality of someone who, seeing the damage austerity is doing to our economy and the economies of others, would not jump at the chance to ease the burden on people. If he had any sense, there would be no more cutbacks at all, lest the entire country fall into one giant pothole.
Acting like this is something we NEED to do to get finances in order after it’s been essentially disproven is insanity and I don’t understand why Noonan isn’t physically removed from his position at this stage.
have your say