Servicing debt will cost us more than health service
THE people of Ireland will soon be spending more money on servicing our national debt than we put into the HSE — and our bill will be even more than Greece’s outlay, new data predicts.
The debt explosion following the banking crisis means over 11 per cent of our GDP will now be needed just to stabilise public debt over the next five years, a working paper from the Bank for International Settlements (BIS) estimated.
The HSE has a budget of €14bn, a figure dwarfed by the €17bn-plus of GDP the BIS says will have to go towards our national debt.
Incredibly, our debt/GDP ratio will be double that of Greece’s 5.4 per cent level over the next five years. Public debt in Ireland has almost trebled, soaring by 98 per cent between 2007 and 2009, the BIS calculated. It stood at €75bn at the end of last year.
The chunk of GDP needed to service our deficit will keep rising, the paper says, hitting 13 per cent by 2020 — considerably more than for the major industrialised countries like Britain, the US, Germany, and more than other struggling countries like Greece, Spain or Portugal.
Even imposing severely draconian measures on public spending might not be sufficient to bring rising debt under control in many countries, including Ireland, the BIS said.