piigsty

One often forgotten element to the massive debt pile Ireland must pay is the overall interest payments we must fork out each year. Ireland has two dual problems. The first is a sovereign debt crisis (which requires cash transfers from the EU-IMF in return for austerity programmes promising to restrain spending). The second is a banking crisis (which requires government guaranteeing major banks and paying bank debt in full to get the credit market flowing again without heavy penalties).

Here are the figures:

Potentially, the worse case scenario here would mean approximately €12bn in annual interest payments by 2012. For perspective, this would represent 85% of the entire 2010 income tax revenue.

This entry was posted on Tuesday, August 9th, 2011 at 18:36 and is filed under Musings. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.