Is the interest rate on EU money not actually 7.25% taking account of our NPRF

He3

Well-known member
Joined
Oct 1, 2008
Messages
17,077
Seabhcan spots something big here - is he right?

seabhcan said:
I'm not so sure - I think they are trying to spin it.

The State’s contribution to the €85 billion facility will be €17½ billion, which will come from the National Pension Reserve Fund (NPRF) and other domestic cash resources. This means that the extent of the external assistance will be reduced to €67½ billion.

...

If drawn down in total today, the combined annual average interest rate would be of the order of 5.8% per annum. The rate will vary according to the timing of the drawdown and market conditions.


Presumably the pensions reserver funds are at 0%, as its already our money. They form about 20% of the total amount. If one fifth of the amount is at zero percent, and the average is 5.8% - what is the interest on the rest of the money? I calculate 7.25%
http://www.politics.ie/economy/144353-announcement-joint-eu-imf-programme-ireland-irish-gov-statement-2.html#post3225887
 


chippie

Active member
Joined
May 20, 2007
Messages
139
Twitter
IrishEconFacts
I am trying to work out the same thing, surely we are not borrowing our own money. Is the 5.8% average on the external funds or the entire pot. If its on the €85m we are being led up the garden path.
 

gijoe

Well-known member
Joined
Jul 26, 2010
Messages
15,237
No. We are borrowing up to €67.5billion rather than €85billion and that is what the 5.8% applies to. However, economists would apply an 'opportunity cost' of applying the €12.5billion of NPRF money to the package.
 

maxthedog

Well-known member
Joined
Apr 13, 2009
Messages
1,078
Have you calculated in the loss of interest that the 17 billion would earn over 5 years , if invested in bonds at 4%
 

nuj

Well-known member
Joined
May 26, 2004
Messages
518
Cardiff of DoF saying no, the 5.83% is on the €67.5bn.

You can choose to believe him, or not. My personal internal jury is still out.
 

mothball

Well-known member
Joined
Apr 21, 2006
Messages
681
Ok. Say it is 7.25%. What difference does it make? We can't afford 5.8 anyway. It just means Fianna Fáil and the swamp rat Greens have been spinning more lies, but what else can we expect from those traitors.
 

hammer

Well-known member
Joined
Jul 6, 2009
Messages
58,180
I wonder what the loss will be if the NPRF has to liquidate its non cash assets :(

Will that be taken into account. Not on your nellie :)
 

d7bohs

Well-known member
Joined
Feb 21, 2009
Messages
1,108
Moore McDowell asking the same question now.
 

TonyB

Well-known member
Joined
Sep 29, 2009
Messages
801
Twitter
technopolitics
Moore McDowell on radio 1 now. Says the NPRF money is at 3% (to ourselves?!?), and the 5bn from cash reserves would have been borrowed earlier in the year at lower interest rates. Therefore the 17.5bn from "our own reserves" is not at zero, but is at a blended lower rate than 5.8...the "foreign" money therefore is at a higher blended rate, presumably north of 6%.
 

Walkman

Active member
Joined
Nov 12, 2010
Messages
141
Moore McDowell asking the same question on Radio 1 now.
This needs to be clarified quickly, have we been lied to again!
 

nuj

Well-known member
Joined
May 26, 2004
Messages
518
CS - it's also been referenced on irisheconomy.ie, quoting the propertypin.ie quoting P.ie.

Pop Will Eat Itself had it right.
 

d7bohs

Well-known member
Joined
Feb 21, 2009
Messages
1,108
Joan Burton now asking the same question
 

Breadan O'Connor

Well-known member
Joined
Jun 3, 2007
Messages
1,242


New Threads

Most Replies

Top