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Colm McCarthy: Budget overshoot is on cards as is a dreaded second bailout

Reactions to budgets, and to other newsworthy developments, need to be placed in the correct medium-term context. The EU/IMF rescue funds being loaned to Ireland run out at the end of 2013, after which point the Government will have to borrow whatever it needs under its own steam on the open market.

It will need to borrow very large amounts. The budget deficits will remain sizeable (almost six per cent of GDP is the planned figure for 2014) and there will be big roll-overs, maturing bonds that have to be re-financed with new issues. Eventually the official lenders will have to be re-paid, again through new issues on the open market.

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