Following yesterday’s successful bond sale in which the NTMA raised funds under 3% (yield of 2.967%), Fianna Fáil Spokesperson on Finance Michael McGrath has called for consideration to be given for action by the NTMA to significantly reduce the current interest burden of the national debt.

At present, the average interest rate on our national debt is approximately 4%. This is made up of both market and official funding under the EU / IMF programme.

Deputy McGrath said, “There are two options that the NTMA could consider. Firstly there is the option of an open market buy back of some of the more expensive debt funded from either the cash reserve we currently hold or issuing new debt at the current lower rates.

“Secondly, while the interest rate on out EFSF / EFSM funding was reduced and the term extended we are continuing to pay 4.1% on our loans from the IMF.  I have raised the issue of paying off the IMF loans with the Minister for Finance. Refinancing these loans at even 1% lower than the current rate would save us €225m on an annual basis. In order for this to happen we need to secure the agreement of the European Commission and the ECB.  Given that the European authorities have already stated that they wish to enhance the sustainability of the Irish economic recovery, agreeing to allow us pay off our more expensive loans would be a practical demonstration of this commitment.

“I am calling on the Minister for Finance to work with the NTMA to bring this about. I also believe that savings that are achieved should be deployed to support investment in infrastructure and job creation.”