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debt deal Q&a

Ireland steps closer to baIlout exIt 23

WHAT DOES THE DEBT DEAL MEAN? The Government successfully negotiated a deal with the European Central Bank that means we will have much longer to pay this debt - taking a huge amount of pressure off our public finances.

WHAT IS A PROMISSORY NOTE? In 2008, the Fianna Fail government, with the support of Sinn Fein, had the bright idea of bailing out the banks including the toxic Anglo Irish Bank and Irish Nationwide. They did this by issuing a promissory note, or an 'IOU' to Anglo. This was a complex arrangement but the bottom line was that this money had to be repaid from public money, to the tune of €3.1 b every March for eight years. To add insult to injury, Fianna Fail gave themselves an interest rate holiday, ensuring they didn't have to start repayments in the run in to the General Election in 2011. thanks to this new deal, the €3.1 b repayment will not be made this March or any other March.

WHAT DOES THIS DEBT DEAL MEAN FOR HOUSEHOLDS? This deal means we will have to borrow less in the coming years than would otherwise have been the case. It will reduce by €1b the gap between our revenue (income) and expenditure every year. As a result, our debt payments will be far more manageable which means there will be fewer cuts and fewer tax increases in future budgets.

ANGLO-IRISH

THE COST OF BORROWING 23 Irish 2 Year Bonds Irish 2020 Bonds

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AN IMPORTANT STEP FORWARD ■ No more €3.1b repayments; €1b less in cuts and tax increases

The recent debt deal is a major boost for Ireland. The cost of borrowing for the Irish government has fallen significantly over the last few months, reflecting the growing confidence surrounding the Irish economy's outlook. Ireland is now well positioned to be the first bailed out country to successfully exit from a Eurozone rescue programme.

WHY IS THIS A GOOD DEAL FOR IRELAND?

■ Borrowing requirements cut by €20b over next 10 years ■ Anglo Irish Bank wiped off the map

Working with your Local Labour Team

The deal means that rather than paying this debt in massive annual instalments, we will extend the payments over a much longer period of time, making the payments far more affordable. For example, most people, if they owed €1,000 and they didn't have to pay it back for 30 years, would recognise that as a very good deal. Similarly, this historic deal is a major boost for the country.

WAS A DEBT WRITE-OFF EVER ON THE CARDS?

LABOUR STICKING TO ITS PROMISES Before the last election Labour promised that we would renegotiate the bad deal entered into by the previous government and that we would lift the burden of that unfair deal off the Irish people. Since we came into Government, we have been doing just that inch by inch, step by step. There is much more work to be done, and we are not out of the woods yet. Work is underway and on-going to renegotiate the arrangements around the money that the previous government put into recapitalising the banks. We are committed to working towards bringing about recovery and that is what we are doing.

John Lyons TD

Cllr John Redmond Finglas/Ballymun Ward

Cllr Steve Wrenn Finglas/Ballymun Ward

Dáil Éireann, Dublin 2 Tel: 01 618 3280 Email: john.lyons@oireachtas.ie Blog: johnlyonstd.blogspot.com Web: labour.ie/johnlyons

John lyons td

ADVICE CLINIC TIMES If you would like to meet me to discuss any issue, I hold regular advice clinics:

Cllr Andrew Montague Artane/Whitehall Ward

Cllr Aine Clancy Cabra/Glasnevin Ward

Mondays at 10am in the Axis Theatre, Main St, Ballymun (ask at reception)

Dáil Éireann, Dublin 2 Tel: 01 618 3280 Email: john.lyons@oireachtas.ie Blog: johnlyonstd.blogspot.com Web: labour.ie/johnlyons

Mondays at 12 noon in the Deputy Mayor Pub (upstairs), St Margaret’s Rd, Charlestown Fridays at 10am in the Labour Party Office (above Hickey’s Pharmacy), 5 Main St, Finglas Village All except Bank Holidays and the month of August.

Emer Costello MEP MEP for Dublin

facebook.com/JohnLyonsDublinNorthWest @JohnLyonsTD 0612

no. the ecb has no legal power whatsoever to write down Ireland’s debt, or anybody else’s debt for that matter. The Greeks, for example, are in a far worse situation than we are, and when they asked the ECB for a write-down, they were sent away with a flea in their ear. Our negotiating team knew better than to make themselves look foolish by asking for something they knew could not be conceded. A default on our debt would plunge the country into an even worse economic crisis that could last for decades.


tIMelIne oF tHe proMIssorY note/debt deal october 2012

10 January 2013

5 February 2013

7 February 2013

We are open to renegotiation of promissory note, says Germany

Jose Manual Barroso lends support to promissory note solution

Government Parties are at one on deal say Tánaiste and Taoiseach

EMC meet to approve details of the deal with the ECB. Cabinet signs off on deal before Eamon Gilmore and Enda Kenny provide details to the Dáil.

June 2012

december 2012

27 January 2013

6 February 2013

Restructuring of Ireland's promissory note necessary, admits IMF

We will not make promissory note payment in March, says Pat Rabbitte

Eamon Gilmore warns of potentially catastrophic effect on Ireland if terms are not renegotiated

Economic Management Council (EMC) ie, Taoiseach, Tánaiste, Ministers Howlin and Noonan meet to discuss progress on the deal and agree on immediate Anglo shutdown. Cabinet meets to approve legislation and Bill passes all stages in Oireachtas overnight.

renegotIatIng our bank deal: progress Made

tHeY saId It couldn't be done:

done deal - tHe response:

Labour committed to renegotiating our bank deal. So far we have:

"The idea that we can unilaterally renegotiate the programme is wrong, and that's what Labour is proposing. Not in the real world." Micheál Martin, leader of Fianna Fail, 2 February 2011

"The elimination of the IBRC promissory notes and their replacement with new government bonds maturing from 2038 to 2053 is an important breakthrough for the Irish Government."

■ Reduced the interest rate on our Troika loans to a value of almost €10 billion, in addition to spreading out the repayment over a longer time frame

editorial, the sunday times

■ 50% of sale of non-strategic State assets secured for job creation and stimulus ■ Burden sharing of €5b with junior bondholders, and €2b in private sector contributions towards the cost of recapitalising the banks

“It is clear the government’s so-called negotiation strategy on the banking debt is now in tatters." Mary lou Mcdonald, sinn Fein, 26 september 2012

■ A far-reaching agreement to break the link between banks and State easing the enormous bank debt burden on the State and aiding our recovery ■ Historic deal to restructure the promissory note resulting in €20b cut in borrowing

"This is a very good outcome which represents a small but significant step on Ireland's long road to economic recovery." editorial, Irish Independent, 8 Feb 2013

“We need the government to stand up for the people and say that we cannot take any more, but there is little sign from this coalition of the strength and resolve necessary.” pearse doherty td, 31 dec 2012

"Big step for Ireland should lead to giant leap for Eurozone." editorial, Financial times, 8 Feb 2013

Anglo Irish RIP  

Information on the Government's successful re-negotiation of the Promissory Notes - an important committment from Labour prior to the Genera...

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