Government must nurture economy

The Government has secured a major political victory in restructuring the promissory notes, but the economic benefits are more limited and will not guarantee Ireland’s exit from the EU/IMF bailout programme.

The State no longer has to cough up €3.1bn payments every March for the next decade. Instead, this €28bn debt has been rolled out into long-dated bonds with an average maturity of 34.5 years. There could be more good news on the way as the Government seeks approval to extend the repayment terms of the bailout loans.

These measures will certainly put Ireland’s public debt on a more sustainable footing, which is still forecast to peak at 121% of GDP. But Ireland’s re-entry to the markets over the medium- and long-term hinges on a more com-plex set of factors than extending the profile of existing debt.