Servicing State debt 'costs each worker €3,400 in tax a year'
The interest on the national debt is costing each worker in the State €3,400 in tax per year, the head of the National Treasury Management Agency has revealed.
That compares with €900 in 2007, NTMA chief executive Conor O'Kelly said.
The debt pile is €207bn, the equivalent of €102,000 per employee, he added. "That is easily the highest in Europe, by a mile," he said. "It's one of the highest ratios in the world."
Ireland's debt is now four times the size it was in 2007, when it was €47bn, and while the debt-to-GDP ratio is falling as a result of the growing economy, the level of debt is not, he added.
Ireland remains a "very indebted nation" despite the economic recovery and the record low interest rates that the State is currently able to lock into its borrowings, Mr O'Kelly told the inaugural Global Business Forum at Trinity College yesterday.
"It is an extraordinary environment and that leads people to believe that the crisis is over and we can move on," Mr O'Kelly said.
"But unfortunately, like households, and there's a lot of private debt still in existence, similarly the country has a legacy. The debt in Ireland has risen by four times since 2007. The size of the debt isn't going down, the size of the economy is growing. And that's making our (debt-to-GDP) ratio fall. In actual terms we owe €207bn. That's up from €47bn in 2007."
Mr O'Kelly, who was appointed head of the NTMA in January of last year, taking over from John Corrigan, said that other countries, such as Japan, have high debt levels. But in Japan's case, its bonds are funded by domestic savers.
"Ireland is a small, open economy and 90pc of our investors come from overseas. We rely on international investors to lend us the money when we need it, so we don't have any safety net and that means we have to be very careful about their perception of us and what we're doing," he said.
And he sounded a cautious note on calls for the Government to take advantage of the low rate environment to borrow for infrastructural projects.
"It's like saying to a household who has a very big mortgage, some credit card debt, 'why don't you go out and borrow some more money'. It's very difficult no matter how cheap it is for us to access funds at the current time," he said.
"We have to recognise that we are still a very indebted nation."
Mr O'Kelly also estimated that the State is likely to get back around €30bn of the money that it put into bailing out the banks.
Speaking to reporters on the margins of the forum, Mr O'Kelly said investors are holding off on making decisions in relation to Ireland because of next month's referendum in the UK.
"It's more a decision to hold fire and I think you'd probably have people holding off on decisions in relation to Ireland because of Brexit, that's definitely occurring," he said.
Meanwhile, at a separate event, BNP Paribas' head of global markets in the EMEA region, Pascal Fischer, praised Ireland for its recovery from the financial crash.
"I have been very, very impressed by the way this country has recovered from the massive shocks of a few years ago. I have a lot of respect for what you have done at a country level and more specifically in the financial sector," Mr Fischer said at the Federation of International Banks in Ireland conference in Dublin yesterday.