The committee was told Ireland is more at risk than other countries due to 90% of our borrowing coming from foreign capital.

The committee was told Ireland is more at risk than other countries due to 90% of our borrowing coming from foreign capital.

“THE CHANCES OF a recession in Ireland are 100%,” CEO of the National Treasury Management Agency (NTMA) said today.

Addressing the Oireachtas Public Accounts Committee (PAC), CEO Conor O’Kelly said Ireland has a “mountain of debt” that makes the country more vulnerable than other sovereign States.

“We are in the permanent contingency in Ireland with the debt that we have,” he said, adding:

“People talk about whether the bond market is predicting a recession or whoever else is predicting a recession; I’ll give you a prediction of a recession – the chances of a recession in Ireland are 100%.”

The PAC also heard today that Ireland has paid €60 billion interest on its national debt over the last 10 years.

That is three times more than was paid in interest in the years between 2003 and 2009.

“In the 10 years since the onset of the crisis, we have paid close to €60bn in interest on our debt; in the previous 10 years we paid close to €20bn in interest costs.

“That increased interest has added to the overall debt level because up until last year’s budget surplus, we have had to borrow to pay this interest,” O’Kelly told the committee today.

Members were also told that Ireland’s economy is more vulnerable to shock because of Ireland’s high level of debt.

In addition, the committee was told Ireland is more at risk than other countries due to 90% of our borrowing coming from foreign capital.

Risks on the horizon

They noted this in relation to there being “external risks on the horizon”.

The committee was told the foreign capital we borrow comes from investors who are all overseas, which was classed as “unusual”.

“They can change their mind… they can charge you more… we are quite exposed,” said the NTMA CEO, who added that these investors in which Ireland relies on are “worried” about Brexit and changes in Ireland’s rate of corporation tax.

Gross debt since the crisis is at €205 billion at the moment, said the NTMA, stating that is four times what it was before the recession.

Speaking about the “mountain of debt” Ireland has, the NTMA boss said there “is only one way to get down a mountain – very carefully and very slowly. It will only happen slowly”.

They added that the risk of having high debt is the same as it is for any household.

“If we get a downturn, you are more vulnerable, there is no difference for a sovereign [country] as it is for a household,” he added.

“Ireland is not in a good position from a debt point of view, and we have to bare that in mind and be vigilant,” the committee was told.

The escrow fund that holds €14.3 billion paid by Apple in backdated taxes and interest to the State was also discussed in today’s committee meeting.

The PAC heard today that the value of the fund had declined €16 million last year.

Despite the fall in value, the NTMA said the fund is “operating satisfactorily”.