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Government's promissory note plan to cost the state an additional €90 million this year – McDonald

29 March, 2012 - by Mary Lou McDonald TD


The Sinn Féin deputy leader Mary Lou McDonald TD has said that the Government's promissory notes plan will cost the state an additional €90 million this year because of Bank of Ireland's involvement in refinancing the sovereign bond.

Deputy McDonald said that this figure is just over half of what the Government aimed to bring in with the Household Charge.

The Dublin Central TD said that Sinn Féin had made the point all along that there was room to move on the notes, but that the Government's negotiations had not been a success and the €90 million cost to the Exchequer was a result of this.

Deputy McDonald said:

“As my colleague Deputy Pearse Doherty has pointed out, there should have been a write-down of this unjust debt, not a deferral. This is what the Government should have sought. Instead they have bounced the debt down the road but still intend to pay it.

“The result of this negotiations failure appears to have an additional effect of costing the state money - the interest payments on the notes are no longer circular. The state will end up paying interest on this sovereign bond when it is refinanced by Bank of Ireland and this will cost €90 million this year. That is over half of what the Government had aimed to bring in with the Household Charge.

“People will be disappointed when they see the Government congratulating themselves on this deal because it has no effect on their lives - austerity continues and in fact now there is added millions this year to cater for.

“The Government’s job is far from being done. Nothing short of a write-down of this debt can be considered a success.”

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