Ireland Now Paying €15m In Interest

Despite yesterday's sale of €1.5bn in government bonds, the Opposition has pointed out Ireland is still paying €15million per year extra in interest.

The National Treasury Management Agency announced yesterday it had secured €1.5bn from Irelands debt sale during yesterday's auction despite being in the throws of a hostile international market.

However, due to the Ireland's troubled reputation, taxpayers will pay just over 6% on the eight-year bonds compared to 5%, which they paid at the last such bond auction in June.

Speaking yesterday evening, Fine Gael front bench spokesman Leo Varadkar welcomed the bond auction, but warned the cost of borrowing had shot up by around €15 million in just one month over external concerns about the country's ability to pay its bills.

“It’s a relief for Ireland’s families and businesses to see the NTMA being able to raise the funding required. However, the yield has risen considerably yet again.

“This means higher interest payments of around €15 million per year compared to what it would have cost to borrow the same amount of money only a few months ago. This is the price to the taxpayer of the growing lack of international confidence in the Government.

Mr Varadkar said that in just one month, the yield on four-year bonds increased from 3.6% to 4.7%, and the yield on eight-year bonds has increased to 6% from 5.1% in June.

“Before the recession kicked in, Ireland was able to borrow money on the international markets at German rates. If this were still the case, Ireland would now be paying €40 million less in interest repayments on this latest auction, on an annualised basis," the TD said.

(DW/GK)