Wednesday 13 December 2017

Editorial: We should not be punished for making painful progress

IMF chief Christine Lagarde
IMF chief Christine Lagarde

It will come as a shock to most people that the Government is now paying multiple times the interest rate on bailout loans than it would cost us to borrow on the markets today. A report in our Business pages sets out the figures. Replacing €22.5bn of expensive IMF loans with normal market borrowings could potentially save as much as €930m this year for the Exchequer, although the saving would be less as the total debt is whittled down.

The interest charged by the IMF increased earlier this year to 4.99pc, while the price of borrowing on the markets has fallen to barely more than 1pc annually for the Government to borrow for seven years.

Those kind of numbers could have huge implications for the Budget in October – the potential difference between another vitality-sapping round of austerity and at least some prospect of a desperately needed economic boost.

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