Readers like you keep news free for everyone.
More than 5,000 readers have already pitched in to keep free access to The Journal.
For the price of one cup of coffee each week you can help keep paywalls away.
# Fiscal Advisory Council
Charts: Here's how the government's liabilities have increased to €208bn in five years
The government’s liabilities last year were a whopping €208 billion.
WE ALL KNOW that the State’s liabilities have increased massively in recent years with the onset of the financial crisis and economic downturn but by just how much and in what way?
A new report from the Fiscal Advisory Council – which assess the government’s budgetary objectives and determines if they are being met – claims to provide a comprehensive assessment of the State’s balance sheet after the financial crisis i.e. what are its assets and its liabilities.
As the above charts show the government’s liabilities have increased four-fold since 2007 increasing to €208 billion or 127 per cent of GDP last year.
While in 2007 our liabilities were made up primarily of short-term debt and bonds, that type of liability is much less of the overall pie now as we can’t access funding from the normal lending markets in the way we used to.
As the second chart shows our loans from the Troika make up 30 per cent of our liabilities while the €25 billion in promissory notes – abolished and replaced with longer-term debt earleir this year – made up over 10 per cent of our liabilities last year.
Genrally, the FAC report points out that Ireland is the third most indebted state in the euro area and has experienced the fastest deterioration in net worth of any EU state.
The liquidation of IBRC could lead to substantial financial gains for the State, the report also says.
The Council wants the government to perform a €3.1 billion adjustment in the Budget next month but as we know that is the subject of much wrangling among the coalition partners.
Tánaiste: Budget cut of €3.1 billion not necessary to meet deficit targets
Read: Fiscal council finds ‘wiggle room’ on Budget targets – but wants full cuts
Read: Ireland still has 39% chance of defaulting, says Government’s budget adviser
