Deputy says debt deal boosts Ireland's economic future

Fine Gael TD for Cavan and Monaghan, Deputy Joe O'Reilly, has today said early hours deal struck to liquidate former-Anglo Irish Bank, now IBRC, along with deal agreement between Government and the European Central Bank on the repayment of promissory notes will deliver a significant boost to Ireland economy in the future. A deal has been reached with the European Central Bank in relation to the promissory notes used to bail out the former Anglo Irish BanK, with a Special Liquidator set to sell IBRC assets in the coming months, with the National Asset Management Agency directed to acquire what remains along with the sale's proceeds. This will be done via a newly established NAMA subsidary named National Resolution Ltd, which will acquire a floating charge over some IBRC assets. Earlier, ECB President Mario Draghi said the governing council of the bank had "taken note" of the Irish operation on the Anglo Irish Bank promissory note. Fine Gael Deputy Joe O'Reilly though says the deal agreed by the Government is a "hugely significant step forward in our economic recovery" He says this is because thanks to the savings delivered as part of the deal, the budgetary adjustment needed for next year will be €1 billion less that expected. Furthermore, he says Ireland will now have to borrow €20 billion less on the international markets over the next decade as a result of the deal. "This will have a major impact on our long term economic sustainability and our prospects for growth and job creation", Deputy O'Reilly said in a statement to The Anglo-Celt. "There are a number of important elements of this deal, which will help economic growth and recovery. The promissory notes are being replaced with a long-term bond; essentially what was a high cost, short-term loan is being exchanged for long-term, cheap, interest only loans. We are stretching the period to repay the loans over 40 years, and the first principal payment won't be made until 2038. The last payment will be made in 2053. "The interest rate on the new bonds is also crucial; the average interest rate will be just over three per cent, compared with a punitive rate of well over eight per cent on the promissory notes. This interest rate cut will have an impact on Irish taxpayers in the short term; it means we will have to make budgetary adjustments for next year and the year after that are €1 billion less than previously set out. That's €1 billion less in taxes and cuts", he said. Deputy O'Reilly went on to say that the burden of the promissory notes, which he believes had been "strangling the Irish public", is now "gone forever". "Now, we will push ahead with renegotiating other elements of the bank debt burden, including breaking the link between banking and sovereign debt. "I would like to pay tribute to the efforts of the Taoiseach and the Minister for Finance, as well as the entire Government, who have worked tirelessly to reach this point. This deal does not solve all of our problems, but it greatly improves our chances. It will give the Irish people, and the international community, confidence in our ability to continue on the path to economic recovery", Deputy O'Reilly concluded.