Fianna Fáil TD for Laois Sean Fleming says a number of Government Departments have suffered financial cuts since June 2014 as a result of negative interest rates being used against them in respect of their deposits with the Central Bank. This has resulted in cuts to public services.

Deputy Fleming made the comments after raising the issue with the Governor of the Central Bank, Philip Lane.

“The Central Bank has been charging negative interest rates for the last two years on cash deposits made by Government Departments and state organisations. The current rate is -0.40%. This means Government agencies are losing money on deposits with the Central Bank on a day to day basis,” said Deputy Fleming.

“This impacts directly on public services as a number of Departments deposit money with the Central Bank. For example, the Department of Education has been penalised by €523,571 since June 2014 while the figure for the OPW is €111,871 for the same period. This is money which should have been invested in education and flood defence works.

“I believe the Central Bank needs to reassess this practice. They try to justify their taking of money from public services by saying they return some of it to the Department of Finance. However this money is not passed back to the relevant Government bodies. The net result is that public services are being cut while the Department of Finance coffers are expanding.”