Fine Gael Kerry Senator and Seanad Chief Whip, Paul Coghlan, has today (Thursday) described the deal to wind down the former Anglo Irish Bank which was struck by the Government last week as the most brilliant piece of financial engineering in the history of the State. Senator Coghlan was speaking during the Order of Business in the Seanad.
“The deal reached by the Government on the Anglo debt, which was the most brilliant financial engineering in the history of the State, delivers on our commitment to put a fairer and sustainable arrangement in place than was the case with the promissory notes. Once and for all, the remnants of Anglo Irish Bank and Irish Nationwide have been wiped from the financial and political landscape.
“The annual promissory notes payments, which were a death sentence for the State, are now gone forever. The deal to turn the promissory notes into a long-term bond is the most significant financial development since the last Government signed up to the bank guarantee. The difference is, while the bank guarantee turned out to be a disaster, this deal is a step forward on our path to economic recovery.
“The State simply could not afford the short-term annual payments of €3.1 billion, which we faced in the absence of this deal. We have now replaced that debt with long-term bonds, and no capital at all will be repaid before 2038, when, no doubt, we will have a vastly different financial landscape.
“Another crucial element of the deal is the fact that the interest rate has been slashed, again resulting in a much smaller burden for the State. This deal means the Government will have to borrow €20 billion less over the next 10 years, and the adjustment needed to reach our deficit target by 2015 has been reduced by €1 billion.
“Sinn Féin and others have been calling for a write-down or a default. I would ask them; do we want to be the next Argentina, a country where a quarter of the population went hungry when their economy imploded in 2001? No, we don’t. This State has always paid its way and will continue to do so. We will be frugal and prudent.
“I would like to compliment the Minister for Finance, Michael Noonan TD, and the Governor of the Central Bank and all of the officials involved in securing this deal.”