National debt set to double to €150bn, latest figures reveal
Published 17/01/2010 | 05:00
Ireland's national debt is set to double to €150bn, new figures obtained by the Sunday Independent reveal.
As a result, in a devastating realisation of the country's woeful financial position, one-fifth of all taxes raised will have to go just to pay off interest on the debt mountain.
Despite strong assurances from Minister for Finance Brian Lenihan on Budget Day that the worst is over, figures from his Department show the exact opposite.
With the collapse in taxes since 2007, from a peak of €47.3bn to just €33bn last year, Ireland's national debt has already spiked to a startling €75bn -- but new figures from the Department of Finance show that by the end of 2014, that figure will be a startling €150bn.
According to the latest dire forecast, €18.75bn will be added to the national debt this year, €18bn in 2011, €14.75bn in 2012, €12.5bn in 2013 and €9.25bn in 2014.
More alarming is that between now and 2014, over €32bn in taxes will be spent merely on serving the interest on the country's borrowings.
It must also be realised that these figures represent the best-possible-case scenario, given the unreliability of Department of Finance forecasting in recent times.
Senior Finance Department figures said last night that the alarming escalation in the country's national debt means that next December's Budget will once again have to look at further reductions in government spending.
The total pay and pensions bill for the public sector for this year is €17.2bn, which is an 8 per cent decrease on last year. However, it is envisaged that another such drop next year would again be required.
Richard Bruton, Fine Gael's deputy leader and finance spokesman, said that the latest figures show that the country is locked in a vicious cycle, adding that the Government has prepared no plan to get us out of it.
Speaking yesterday, Mr Bruton said: "We are borrowing at an unsustainably high rate, and as a result our national debt is racking up at an alarming rate.
"The most worrying aspect of all of this is that there is no plan to break this cycle other than slash and burn."
The Government is now borrowing €30.5m a day to pay the unsustainable wages of public sector workers who are earning up to 50 per cent more an hour than those in the private sector.
The figures obtained by the Sunday Independent reveal that inflated wages and inflexible work practices in the public sector are punishing the Irish economy and causing Ireland's debt levels to spiral out of control.
The public finances deteriorated sharply last year, with Ireland's Exchequer balance worsening by almost €12bn, new figures from the Department of Finance show.
An unprecedented €7.7bn decline in tax revenue -- down 19 per cent on the year before -- and a €4bn payment to Anglo Irish Bank were the main reasons for the €11.9bn year-on-year deterioration in the Exchequer balance.