Machholz's Blog

What is truth?

No matter how Coalition dresses it up, we cannot afford to pay Anglo’s debt

By David Mc Williams

First, the good news. Swapping the debt from a promissory note to a long dated government bond will mean that, in the short-term, the State won’t have to find so much money to pay for the sins of Anglo. My back of the envelope calculation suggests that the savings will be substantial. Had Ireland kept paying the promissory note over the next 10 years, we would have had to come up with €30bn in a decade. That’s a huge figure, more than 20pc of GNP. Clearly, this was not on. This new arrangement means Ireland will have to come up with about €5.8bn.

Paying over a longer period is good news for all of us relative to paying the lot over 10 years. But it is not good news relative to paying nothing at all or to extending the promissory note out for a few hundred years. After all, we could have set the terms of our own promissory note schedule had we the inclination to do so.

More interestingly, we could have paid nothing at all, let the Central Bank continue to finance Anglo and positioned ourselves on a collision course with the ECB. The Government didn’t have the stomach for this scrap and so the ECB’s sweetener for taking the debts of Anglo on as sovereign debt is a long-term horizon to pay the stuff.

The ECB has got what it wants. The pesky promissory note, which it never liked, is gone. Ireland has more debt but at low rates of interest………………………

full article at source>>>http://www.davidmcwilliams.ie/2013/02/09/no-matter-how-coalition-dresses-it-up-we-cannot-afford-to-pay-anglos-debt?utm_source=Website+Subscribers&utm_campaign=4b6510736e-22112012&utm_medium=email

About these ads

Author: machholz

I started this Blog to get out of my system the absolute rage that I have for the corrupt politicians and their Banker Buddies. I’m an ordinary guy, married with kids, and have firm opinions of what is right and what is wrong. I’m not afraid to say it even when it makes me unpopular. I reproduce news all manner of articles, but will always confirm the source of the articles; this is a compliment to the source of such news pieces. But if you do not agree with this and you are the original author, I will take down any article when requested to do so. I do not assume that the author of the news articles share with my views, I include news articles to give readers another slant to my views or to illustrate what the mainstream news media say on the relevant topic. The opinions expressed are my own but I do not accept liability for them, If I have offended you or made a factual error please put on record the truth by leaving a comment. In addition, my thoughts and opinions change from time to time...I consider this a necessary consequence of having an open mind. This weblog is intended to provide a semi-permanent point in time snapshot and manifestation of the various memes running around my brain, and as such any thoughts and opinions expressed within out-of-date posts may not the same, nor even similar, to those I may hold today. For the record I am currently an Independent political activist and am not affiliated to any political party

Comments are closed.

Follow

Get every new post delivered to your Inbox.

Join 2,239 other followers