Since late 2016 we have entered the age of disclosures! Fasten your mental safety belt and enjoy the ride! Heretic

Wednesday, March 31, 2010

External debt of Ireland falls to €1.61 trillion

According to todays' Irish Times article.  Population of the Republic of Ireland is 4.5M.

Quote:

Ireland’s external debt continued to fall, standing at €1.61 trillion at the end of December 2009, a decrease of €26 billion compared with the end of September. The figures from the Central Statistics Office (CSO) include general government, the monetary authority, financial and non-financial corporations and households.    ... Credit institutions and money market funds had debt of €661 billion at the end of last year, a fall of close to €30 billion compared to three months earlier, and a decline of €107 billion compared to a year earlier.  However, general Government foreign borrowing rose €2 billion to €75 billion between the end of September and December 31st 2009 as new long-term debt securities were issued, off-setting redemptions in short-term securities. Compared to a year earlier, it was €17 billion higher.  Intra-group borrowing and fluctuating exchange rates accounted for a rise in direct investment debt liabilities of €10 billion to €210 billion.
My comments:

It will take 31 years to pay back 1.6Teu at that rate providing that Irish institutions and households find enough assets to pay all that.   There are many questions,  I am curious as to who the creditors are?  British? Germans?    Why did they lent so much to a country with no assets other than property they were lending for?    If most of that was backed up by property, that is clearly under water now, since the 50% property price drop in 2007-2009.  How could an island nation of 4.5M people own 1.6Teu worth of properties to back that all up?   How long (maturity) are those liabilities?  Does Ireland really own that much in backup assets or is most of that 1.6Teu really unsupported by anything other than a promise to pay it back?  That would be roughly 1Meu per family/household!     Iceland's case springs to my mind.

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