Anglo debt deal to save State €14.4bn, says Davy Stockbrokers
STOCKBROKERS Davy has estimated that the deal on the controversial promissory note will save the State €14.4bn in interest costs on average over the next 18 years.
Davy said the deal swapping the promissory notes with long-term government bonds would save €800m a year in interest on average between now and 2030.
The broker said it was a “significant reduction” in interest costs but claimed it would not dramatically change the budgetary arithmetic.
And it predicted that despite the savings, the Government would stick with its planned budgetary cuts over the next two years.
“So there will be little impact on our forecasts for the Irish economy,” Davy chief economist Conall MacCoille said.
“With the growth outlook uncertain, and the Government locked in negotiations to secure savings on overshooting current expenditure, there is little room for manoeuvre.”
Taoiseach Enda Kenny has said that the deal would mean Ireland would have to borrow €20bn less over the next 10 years.