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Businesses and financial institutions hail promissory notes deal

Danske Bank Markets said it now expects rating agencies to upgrade Ireland’s status while businesses say the deal will improve consumer confidence.

Finance Minister Michael Noonan and Minister for Public Expenditure Brendan Howlin TD yesterday.
Finance Minister Michael Noonan and Minister for Public Expenditure Brendan Howlin TD yesterday.
Image: Sasko lazarov/Photocall Ireland

ORGANISATIONS REPRESENTING Irish businesses and financial institutions have welcomed the deal announced yesterday by Taoiseach Enda Kenny on the IBRC promissory note.

In the Dáil yesterday, Kenny said the promissory notes, which would have totalled almost €48 billion in lifetime costs, are gone. The first payment on the now government bonds will be due in 2038 with the final payment being made in 2053.

IBEC, the group representing Irish business, said the deal was “better than expected” and that it will allow growth and inflation to reduce the real cost of servicing this debt over time.

“This deal will help give consumers and businesses the confidence to plan and invest for the future, and will have a positive effect on jobs and the economy,” Cheif Executive Danny McCoy said.

While Chambers Ireland joined IBEC in its view that the deal would rebuild investor and consumer confidence, it said that Croke park negotiations should now be the government’s top priority.

The Irish Hotels Federation said it expects to see a boost in consumers’ ability to spend in the local economy, which will also have an impact on tourism.

Ireland’s position in the financial markets also appears stronger with Danske Bank Markets saying it expects to see “very strong positive comments from the international ratings agencies and would see significant upside ratings potential from Moody’s in particular”.

While most TDs embraced the announcement, many in opposition criticised the deal which they said would increase the cost of the bailout and will see young people paying the debt back for generations.

Yesterday Sinn Féin President Gerry Adams said: “The fact is that any young person lucky enough to get a job in the economy today will be paying this debt for their entire working life.”

“Today Fine Gael and Labour turned a €28 billion promissory note into a sovereign debt for the state which could reach up to €60 billion,” he added. “The government’s approach will tie this bad debt to citizens for decades to come – our children and grandchildren will have to pay billions.”

Related: Kenny: First payment on new Government bonds in 2038>

In full: ‘The annual promissory note payments are gone’ – Enda Kenny>

Read: Draghi says ECB “took note” of IBRC liquidation>

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