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Archive for March, 2012

On Tuesday last, Fianna Fail’s environment spokesperson Niall Collins received written replies to questions he tabled in the Dail. Deputy Collins asked the same question of each of our 15 ministers – “the amount of expenses claimed on a monthly basis since March 2011 by all Ministers attached to his Department; and if he will make a statement on the matter” He doesn’t appear to have received a response from Minister for Health James Reilly but the details of the other fourteen are here – the information is derived from the 14 individual replies that Deputy Collins received (click to ENLARGE):

He was given a variety of answers, though all except Minister Varadkar (see above), provided figures. It seems that the Ministers decided to interpret the question in their own narrow way, and in general limited the scope of their replies to expenses incurred for mileage and for accommodation. Remember that three members of the Cabinet have retained a ministerial Mercedes and drivers – An Taoiseach, An Tanaiste and the Minister for Justice, Equality and Defence. Other Ministers use their own cars though each is provided with two drivers at the taxpayers’ expense. When they use their own cars, they are entitled to claim a mileage. These are the current rates.

Incredibly Minister of State for Small Business, John Perry has claimed €31,867 mileage allowance in the past 12 months. With the total cost of owning and running an average car in Ireland put at just over €11,000 by the AA, it is difficult to see how Minister Perry is not making a handsome profit on his mileage. Even though Minister for Education Ruairi Quinn’s  mileage costs have come in for some scrutiny by the Irish Mail on Sunday/Daily Mail – and, interestingly, no other newspaper – it is his Minister of State for Training and Skills, Ciaran Cannon, who appears to occupy 2nd place in the mileage stakes with €22,763 claimed for mileage and accommodation. Minister of State for Tourism and Sport, Michael Ring isn’t much better having claimed €22,691 for mileage in the 10 month to January 2012 – his mileage is set out here and here and includes an incredible €4,618.17 claimed for the month of January 2012 alone!

 

Minister for Justice, Equality and Defence, Alan Shatter was ambiguous with his responses, because he provided two – one in which he said that no expenses had been claimed by him or his two ministers of state, and one in which he sets out some expenses which included a claim for €100 for travel vaccinations and €707.77 for hotel expenses for a trip to the Lebanon in October 2011 to visit with Irish UN troops. His ministerial “accomplishments” for the year show that he spent between 14-16th October, 2011 in the Lebanon, or two nights presumably, at a shade over €350 a night for his hotel costs. At least Alan doesn’t have to worry about the €100 household charge, he claimed €100 for travel vaccinations which presumably immunises him for personal travel also, perhaps to see his rental property in Florida. “Get a life!” indeed Alan!

Unwittingly perhaps, Minister Varadkar’s unhelpful reply – it was “unhelpful” because it is quite difficult to get at the information on the Minister’s Departmental websiteeventually revealed more detail than was provided in the other ministerial responses.  Leo managed to spend €2,249.47 on three return economy flights from Dublin to Luxembourg in October 2011 for himself, his private secretary and his Department’s Secretary General. That’s €750 per return flight. The purpose of the travel was to attend a EU Transport Council event which presumably wasn’t last minute which makes €750 for a return economy flight between Dublin and Luxembourg look extortionate when a quick online search suggests an economy price for a return ticket would be under €250. Minister Varadkar provides a breakdown of the €7k of costs of his trip toIndia for 2011 St Patrick’s Day which includes €240 for gifts and there’s the €350 per room per person – Leo brought his private secretary and they needed two rooms, though they did stay one night only at the residence of the Irish ambassador.

Remember the above expenses will exclude a whole raft of allowances and benefits which the ministers claim and which are set out in some detail here. It also excludes any income provided by their own political parties which is claimed from the taxpayer – you’ll find some general details here. And of course it excludes salaries and additional post payments, set out here.

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Today is the last day for NAMA to hand over its latest quarterly management report and accounts to Minister for Finance, Michael Noonan. The accounts will cover the three month period ending on 31st December 2011 and will also show the annual figures for 2011. For the first time in NAMA’s reporting of its results for 2011, we will see what NAMA calculates to be its so-called “impairment charge” – this will make the difference between profit, and remember NAMA was last week forecasting a profit before impairment of “at least €750m” and loss, sadly NAMA didn’t have an estimate of impairment charges last week. Although these accounts that are due today are not fully audited, and NAMA will not publish its full annual report until the summer, these accounts should give an accurate picture of NAMA’s performance in 2011. Here are seven things to look out for:

(1) The impairment charge. This charge represents the decline in value of what NAMA expects to recover on its loans to developers which totalled about €32bn by reference to NAMA’s acquisition values and €74bn by reference to the original values of the loans. The decline in value is largely driven by declines in underlying property values. In 2010, NAMA’s first full year of operation, NAMA booked a €1.485bn impairment charge. NAMA does not calculate an impairment charge every quarter and waits until the end of the year to conduct what is a large exercise. The betting on here is that the impairment charge will be in the order of €1bn for 2011, but unlike 2010, you can rest assured that the impairment charge for 2011 will be examined on here with a fine tooth comb.

(2) Will NAMA need more capital from the State? You’ll recall that NAMA is an entity with €100m of share capital, with €49m from the State and €51m from “three independent investors” – namely AIB, ILP and Bank of Ireland. And you’ll also recall that NAMA made a loss of €1.1bn in 2010, its first full year of operation. So you might have expected the €1.1bn loss to have wiped out the €0.1bn share capital but no, NAMA performed a little accounting trick whereby part of the payment it made to buy the €74bn of loans from the banks was classified as capital. The so-called “NAMA subordinated bonds” comprise 5%, or just over €1.5bn, of the €32bn that NAMA paid for the loans. NAMA doesn’t have to honour these subordinated bonds if by 2020 the Agency hasn’t broken even. So in 2010, NAMA got away with adding the €1.5bn to the €0.1bn share capital which meant that the Agency still had €0.5bn of “capital” left after deducting the €1.1bn loss. If NAMA makes a loss after impairment in 2011 of more than €0.5bn then NAMA will need to get more capital, something that it has been adamant it won’t need to do.

(3) NAMA’s interest income from developers. We now have considerable detail about the way in which NAMA calculates its interest income, and we know that NAMA doesn’t just account for cash received – it estimates additional interest it will receive when the underlying asset is eventually sold. This has led to all sorts of accusations of Enronesque behaviour, so the interest income reported for 2011 and impairments to that income will be closely examined to ensure NAMA is not overstating profits that will vanish when the assets underpinning the loans are eventually disposed of.

(4) NAMA’s provision for legal costs in the Paddy McKillen case. You’ll recall that Paddy took a case against NAMA in 2010 to stop the Agency from acquiring his loans. Paddy lost comprehensively in Dublin’s High Court but went on to substantially win his case at Dublin’s Supreme Court, and NAMA ended up having to foot the bill. It’s been a year now since the Supreme Court concluded its deliberations and NAMA recently told an Oireachtas committee that it had still not established the costs that the Agency will need pay in the case, though media speculation has centred on a figure of €7m. Minister Noonan told the Dail a week ago that NAMA had not made any provision for an accrual for these costs in its last quarterly accounts, but we will expect NAMA to make a proper provision in its year end accounts.

(5) NAMA’s disposals and profit/loss thereon. It came as a surprise on here to learn a week ago that for the 22 months to the end of September 2011, NAMA had booked disposals of €2.7bn in its accounts. This was surprising because NAMA has been mentioning figures for “approved sales” of €6bn-plus, though of course some approved sales fall through, others take time to complete and some sales may result in payments to other lenders eg Ulster Bank where there were syndicated loans. But even more surprising was the fact that NAMA had booked a profit of just €132m on these €2.7bn of sales because the perception had been that most of these disposals were of the best quality assets in the most liquid markets, ie London where residential and commercial property prices have performed well since NAMA’s valuation date of November 2009. We’ll want to see how NAMA accounts for its biggest single sale to date, the €800m sale of loans in Paddy McKillen’s Maybourne group to the billionaire Barclay twins, which Paddy is presently challenging in a London court. NAMA might have to reverse that transaction and pay Paddy damages – how will the Agency recognise these risks?

(6) Staff and directors’ costs. Although some will begrudge Brendan McDonagh his 2011 salary of €430,000 – which he has agreed to reduce to €365,000 for one year in 2012 – and his bonus – contractually up to €258,000 but which he 100% waived again for 2011 – you might have sympathy for the man when he looks across to IBRC, as Anglo/INBS is now called, where Mike Aynsley cost that company €866,000 in 2011 comprising salary €500,000, pension €125,000, car allowance €38,000 and “other” of €203,000 which includes rent, personal travel and “relocation”. The boss of Blackstone took home almost €200m in 2011 and the boss of BlackRock took home nearly €20m. And yet, there’s Brendan who reputedly works 70 hour weeks in a highly charged political environment, in a commercial environment which is, very euphemistically, “challenging”, dealing with new teams, new legislation with individuals and companies lined up like that scene out of Airplane! with fists, baseball bats, knives and guns, waiting for their opportunity to put the boot in. Beyond Brendan, we know that NAMA chairman, Frank Daly has taken a pay-cut to €150,000. It will be interesting to see what NAMA’s newest director, John Mulcahy gets. And it will also be interesting to see what salaries are being paid to the 202 employees at the Agency. It will be fascinating to see what expenses the non-Irish NAMA director, Steven Seelig has managed to rack up in 2011 – it was €35,000 in 2010.

(7) NAMA’s profit or loss. This would normally have been the headline item in this list, but we already have a good idea of what the profit before impairment will be. Brendan McDonagh told a London audience last week that the profit before impairment would be “at least €750m”. But we know that this includes at least €250m of inflated interest income which has not yet been received and apparently depends on NAMA or the developers selling underlying property at November 2009 prices plus 9% for Long Term Economic Value. So what we want to know is what adjustment NAMA will make to its interest income and also how much it will reduce the value of its loans to reflect deteriorating property prices in Ireland.

So when will Minister Noonan publish these accounts?

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Graph of the Week

 

Last Saturday in Galway there was an economics conference with a great line-up of speakers. You can access the presentations made, here. Professor John McHale of the National University of Ireland in Galway and also the chair of the Fiscal Advisory Council produced the above slide which shows the deteriorating outlook for Ireland’s economy in 2012. Next week, the Department of Finance is set to revise its forecast of GDP in 2012, and the betting is that it will be substantially cut from the 1.3% in the Budget 2012 announcements last December 2011. Will the cut result in the need for a mini-Budget in May?

Quote of the Week

“Recently some harrowing and shocking accounts of sheep worrying in the Cooley peninsula, CountyLouth, have come to my attention. The problem is nearing epidemic proportions and causing great strain among the farming community in the area.” Deputy Peter Fitzpatrick speaking in the Dail on 29th March, 2012.

This is how our national parliament reacted to the Minister for Finance’s announcement about the arrangement for the repayment of the Anglo promissory note. Deputy Fitzpatrick offered the chamber a delay in his own contribution on sheep worrying in order to facilitate a debate on the ministerial announcement about the promissory note. Other deputies, notably Fianna Fail’s finance spokesperson Michael McGrath, the ULA’s Richard Boyd Barrett and Sinn Fein’s Mary Lou McDonald also intervened to ask for a debate on what had been a monumental announcement, that left a great many loose ends that needed answers. Instead the national parliament discussed sheep worrying and there was no debate whatsoever on the announcement.

And speaking of dogs, the Dog that Didn’t Bark of the Week is NAMA for not issuing any press release to mark what is likely to be the single biggest financial transaction during the Agency’s 10-year life-span. Remember this is the Agency which considered it necessary to issue a press release to announce relatively minor news of the recruitment of a relationship manager in January 2012.

Smart-arsery of the Week

Must go to the deduction on here that 135,467 out of 606,600 are paying the household charge with 4x instalments, the rest have paid the full €100. The Department of the Environment had refused to provide the split between instalment and full upfront payers when asked, and oddly the Department kept issuing figures for household charges collected that exactly equalled €100 multiplied by the numbers which the Department said had paid, in other words the implication was that EVERYONE was paying €100 upfront, which was strange given there was no interest charge for instalment payers and things are generally tight in the country at present.

Yesterday however, the Department said that 606,600 had now paid the charge, and said that €50.5m had now been received. So going back to algebra and simultaneous equations

Let x equal the number of households paying the €100 up front
Let y equal the number paying 4 x €25 instalments of which one has so far been collected on 14th March 2012.

So x + y = 606,600 and
x(100) + y(25) = €50.5m and off you go

x= 606,600-y
(606,600 –y)(100) + y(25) = €50.5m
60.6m – 100y + 25y = €50.5m
-75y=10.16m
y=135,467

So 135,467 out of the 606,600 are paying by instalments – I wonder will they pay the remaining three instalments? And why was it only yesterday that the Department released figures which allowed – having done the above maths – you to deduce how many were paying by instalment?

Word of the Week

”Raidering” – no, not “raiding”, but raidering. This word comes from the Ukraine, and I first came to hear it in the context of the Sean Quinn drama in the Ukrainian capital of Kiev where Anglo/IBRC is trying to repossess two valuable commercial properties, a shopping centre and an office block which Anglo says were security on loans advanced to Sean Quinn. What happened was that the property in Kiev has essentially been seized by unknown companies registered in the British Virgin Islands and Belize, on foot of suspicious debts which were acknowledged by a former director of the shopping centre after that director was dismissed from the company. Almost unbelievably a Kiev court allowed the debt to be acknowledged, and so did its superior court which meant that a €50m shopping centre has passed to persons unknown on foot of highly suspicious debts. An Taoiseach Enda Kenny is even understood to have gotten involved by having a quiet word in the ear of the Ukrainian president, but alas it had not effect. Anglo wasn’t taking it lying down and created a website in the Ukraine to protest at these events – it’s worth a look here. But Anglo’s experience is not at all unique and it appears common inUkraine for property to be seized by persons unknown, a practice that has become known as “raidering”.

So what happened on Friday in Dublin when the Government directed NAMA to spend €3.1bn on Anglo promissory notes secured with a newly issued Government bond might be called “raiding” NAMA, if it had been done by persons unknown it would have been “raidering”.

Video of the Week

I hope you’re entertained with this “flash mob” filmed a week ago on Mary Street in Dublin.

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The Irish Examiner is this evening reporting that NAMA today failed to get a judge in Dublin’s High Court to agree to the entry of judgment orders against the Moritz group of companies. The Agency had been seeking to enforce €172m of judgement orders against Moritz Holdings, Maplewood Developments, Rumbold Builders and Highbridge No 2 Limited. Although Moritz has consented to the judgement orders, it was seeking a stay on NAMA enforcing the orders.

Interestingly, the Moritz companies have engaged Noel Smyth and Partners to be their solicitors, and of course Noel Smyth is himself a prominent NAMA developer who has been on the receiving end of recovery action from the Agency.

The judge in the case, Mr Justice Peter Charleton, today ruled in the Commercial Court division of the High Court that a stay be placed on “entry of orders” against Moritz to pay €172m for three months, expiring June 28th, 2012. Moritz had consented to the judgments so the stay just extends the period NAMA must wait to get its hands on Moritz’s assets. Moritz successfully argued that the stay would preserve jobs and interestingly, give Moritz the opportunity to maximise the potential of its assets for NAMA’s benefit. However the Judge did not accept all of Moritz’s arguments and reportedly held that NAMA had acted reasonably and within its powers in challenging the stay.

In addition to the €172m judgment which Moritz consented to, there is apparently further money owing to NAMA but there is to be a full hearing of the case in relation to these additional monies.

NAMA had been opposing Moritz’s application for the stay today, so the three month extension marks a defeat of sorts, and caps off what hasn’t been the best week for the Agency.

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This morning, the Central Bank of Ireland (CBI) has released its monthly snapshot of the state of Irish banks focussing on deposits and lending. The data covers the period up to 29th February 2012 and shows that during the month of February 2012, deposits by ordinary households and businesses actually increased at the so-called “covered” or State-supported banks – essentially the two pillar banks, Bank of Ireland and AIB, and also Permanent TSB. The increase of €125m from €102.6bn in January 2012 to €102.7bn in February 2012 was modest enough but means that private sector deposits at covered banks are at their highest level since June 2011 though the figures below show there has been a stabilisation rather than a recovery. Private sector deposits fell at covered banks in the past 12 months by €6bn from €109bn to €103bn, but most of that fall took place in the first six months of 2011 and since July 2011, the figures have been stable. I think it is fair to say there are signs of stabilisation, but it would be a gross exaggeration to claim “deposits were flowing” into Irish banks.

The CBI doesn’t provide an analysis of deposits at the covered banks – about the only analysis it doesn’t provide – but in terms of all banks operating in Ireland including foreign and IFSC banks, Irish household deposits fell by €0.4bn in February, the second month in a row to see declines. Household deposits at all banks are now back at August 2011 levels. Total deposits from all sources in all Irish banks fell €14bn in February, mostly as a result of a decline in €12bn in deposits by euro area (non-Irish) depositors.

It should be said that the Central Bank’s statistics do not include overseas deposits at Irish banks, for example, Bank of Ireland has a joint venture with the Post Office in the UK which attracts more than €10bn of deposits. And the figures may include what the Dept of Finance calls “consolidation differences”. Having said that, these are the most accurate figures on deposits in Irish banks in Ireland. The Department of Finance publishes its own deposit figures each month, but seems not to have published anything in March 2012.

Here is the full set of deposit statistics for the different categories of bank operating inIreland.

First up is the consolidated picture for all banks operating in Ireland including those 450-banks based in the IFSC which do not service the domestic economy.

Next up are the 20 banks which do service the domestic economy and include local subsidiaries of foreign banks like Danske, KBC and Rabobank. There is a list of all banks operating in Ireland here together with a note of the 20 that service the domestic economy.

And lastly the six State-guaranteed or “covered” financial institutions (AIB, Anglo, Bank of Ireland, EBS, Irish Life and Permanent and INBS – Anglo and INBS have now been merged to form the Irish Banking Resolution Corporation, IBRC)

(1) Monetary Financial Institutions (MFIs) refers to credit institutions, as defined in Community Law, money market funds, and other resident financial institutions whose business is to receive deposits and/or close substitutes for deposits from entities other than MFIs, and, for their own account (at least in economic terms), to grant credits and/or to make investments in securities. Since January 2009, credit institutions include Credit Unions as regulated by the Registrar of Credit Unions. Under ESA 95, the Eurosystem (including the Central Bank of Ireland) and other non-euro area national central banks are included in the MFI institutional sector. In the tables presented here, however, central banks are not included in the loans and deposits series with respect to MFI counterparties.

(2) NR Euro are Non-Resident European depositors

(3) NR Row are Non-Resident Rest of World depositors (ie outside Europe)

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NAMA has this morning published the Direction that was issued by Minister for Finance, Michael Noonan to the Agency yesterday. A Direction is a formal instruction made pursuant to section 14 of the NAMA Act. Here is the Direction (click to enlarge)

 

Here is Section 2 of the NAMA Act referred to above.

 

Here is Section 12 (2) (r) of the NAMA Act referred to above.

 

It is hoped that NAMA will issue a press release for what is likely to be the Agency’s single biggest financial transaction.

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Ireland has a mature parliamentary democracy, it has an independent media, we don’t depend on a single commodity like bananas for our wealth, we are judged internationally to be a relatively honest and corruption-free country. Events last week have undermined these perceptions, namely the publication of the Mahon report on political corruption in zoning and planning, but the past 24 hours has been even more damning with a major financial transaction involving billions of euro in a country with a GDP of €160bn getting a few minutes in the national parliament, confined to a statement which brooked no subsequent questioning and where phone-calls to the Department of Finance apparently went unanswered. And politicians have now gone on holidays for three weeks. Never mind, we can fall back on our “independent media” to analyse what happened yesterday and here are the headlines from our main national media outlets today:

Deal puts off Anglo cash payment

Noonan: €3.1bn deal on Anglo a ‘one-off’”

Noonan seals deal on €3.1bn Anglo debt repayment

Government wins backing on €3.06bn payment

Here’s why we have taken a step closer to Banana Republic status yesterday.

1. There is no “deal” with the Troika consisting of the EU, ECB and IMF. In particular the ECB has given nothing and taken everything. The ECB has issued a statement – not available on the ECB website, but reported by Reuters here – in which it notes the €30bn loan which had been given under its auspices by the Central Bank of Ireland – referred to as “Emergency Liquidity Assistance” or ELA – is being repaid exactly on the terms which existed when the loan was made, and specifically the payment of €3.1bn due today will be made. Any “deal” involves three state-controlled entities – (1) IBRC which is the new name for Anglo/INBS (2) NAMA (3) the Government – and may additionally involve an entity which is presently only 15% controlled by the government but which needs a state guarantee to operate, Bank of Ireland. Those are the parties to the “deal”. Nothing has been given by the Troika and everything has been taken.

2. There is no “putting off” or “deferral” of the payment today of the €3.1bn to IBRC. The money is being taken from NAMA and will pay back the loan from the Central Bank of Ireland today. The Central Bank of Ireland will take the €3.1bn, bring it outside, douse it in lighter fluid and set it alight, or whatever the electronic equivalent is of destroying money which was created when the ELA loans to Anglo were originally made.

3. The payment today of the €3.1bn was originally going to be funded by the Troika who charge us 3.5% per annum for our €67.5bn bailout. Instead, Ireland is issuing a bond repayable in 2025 – we think, the Government yesterday merely referred to a “long dated” bond – and which will pay 6.8% per annum. In other words we will fund the payment with an instrument which costs us twice the rate the Troika would charge us. However, initially it is NAMA that will benefit from the 6.8% and we own NAMA so there’s a saving there of 6.8% less what NAMA was earning on its cash. However the intention is that Bank of Ireland, which we only own 15% of these days, will acquire the bond. What happens next is not clear – here is the Bank of Ireland statement if that helps. Bank of Ireland intends exchanging the bond for cash at the ECB and paying 1% per annum for it, and then charging the Government 2.35% it seems which gives Bank of Ireland a margin of 1.35%, but it is unclear how this sits with the fact that the bond pays 6.8%.

4. Minister Noonan made the statement in the Dail yesterday and then disappeared. There was no debate or elaboration of the details of the “deal”. I understand from sources that attempts were made by Opposition parties to get further information from the Minister and the Department of Finance but phones were not answered and the Government seemed more pre-occupied on the prospect of a three week holiday which began yesterday. That may be unfair but it seems clear that no further statement or elaboration has been forthcoming. NAMA has not issued any statement. There is no evidence of the Department of Finance issuing a Direction to NAMA, under the NAMA Act, instructing NAMA to pay the promissory note today in exchange for a bond.

5. NAMA has in the past invested a small sum – less than €50m – in short dated Irish government debt as part of, what NAMA calls, its “treasury management”. NAMA sold that debt last summer though it recently told an Oireachtas committee that it had €4.3bn of cash at hand with €2bn on deposit with the Central Bank and €2.3bn “is invested in short-term investments pending the use of the cash to redeem NAMA bonds, which we expect shortly”. What NAMA is being called on to do now is to invest €3.1bn in long dated government bonds which represents a significant departure for the Agency. The stated intention is for Bank of Ireland to take the bond off of NAMA’s hands, but that requires Bank of Ireland shareholder approval, and it is not clear why Bank of Ireland would take on a deal which would only pay it a 1.35% margin when it could theoretically buy one-year Irish government bonds today at 4% and exchange these for 1% loans from the ECB, thereby making a 3% margin. So this “deal” with Bank of Ireland, which now needs shareholder approval, has potential to unravel.

6. Why is the money now being taken from NAMA? The Government already has a piggy bank, the National Pension Reserve Fund (NPRF) which has access to over €14bn, and it is normal practice for the Government to direct the NPRF to make specific investments. So why not use the NPRF? The answer is probably that this “deal” is so last minute that the NPRF cannot liquidate investments it has made in time to meet the ECB deadline today.

7. What is the cost of the “deal”? We still don’t know. Minister Noonan referred to the 2012 deficit adjusted by €90m. He said “this will have an approximate €90m impact on the general government deficit in 2012 which is small relative to the overall benefit of the removal of the requirement for the Exchequer to settle €3.06 billion in cash.” Such was the confusion about this statement that there was debate as to whether the “€90m impact” was an additional cost or benefit. It looks as if it is a cost. However we still don’t know if it is a real cost, for example, money going from this state into the pockets of shareholders in Bank of Ireland, or if it is a theoretical cost such as money going from the State to NAMA or IBRC which we both control, and which will eventually come back to us.

8. As for the Irish media and its “winning”, “deal”, “deferral” – the Financial Times calls the arrangement announced yesterday “a bit more bonkers”, it is one of the few international media organisations to report yesterday’s development, which given the headlines in the Irish media noted above, seems curious. Maybe the absence of hard facts, and the reality that there has been no “deal”, that there is no “deferral” (until Bank of Ireland takes on the bond, and even then it is not clear what the financial impact of the arrangement will be) means that yesterday’s arrangement is not very newsworthy at all and that Ireland is repaying its debt exactly as planned.

9. As for so-called “debt sustainability”, the governor of the Central Bank of Ireland had a go at explaining the concept to the Oireachtas finance committee earlier this week, and he claimed that even though our national debt might increase, if the interest rate or duration for repayment improved, then “debt sustainability” may also improve. The Troika loans are repayable, in the main, by 2022 so substituting a Troika loan with a bond repayable in 2025 pushes out the duration, but a bond paying 6.8% is, on the face of it, more expensive than the 3.5% loans from the Troika. So at this stage, it is unclear if our debt sustainability has in fact improved.

All in all, yesterday was not a good day for the reputation of this country.

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