The Costs of Banking

3rd July, 2009

The Exchequer Figures yesterday and the reaction of Moodys (one of the leading international rating agencies) exposes a lie that the Government has been spinning. Out of the €15 billion current deficit nearly €6 billion is to fund the bank rescue scheme. Moodys decreased the rating of our debt and said that the further down ratings were likely. What does this mean?


It means that the cost of government borrowing will increase. This is because the interest rate that government will pay on their borrowing will go up. This will cost the tax payer more. The €6 billion for the banks is one of the main reasons for this happening. Again and again the Government said that their plan would not cost the tax payer a cent. This was utterly exposed yesterday.


I asked for a debate in the Seanad before we break. This will now happen next Friday. In Leinster House all day as there is legislation going through in relation to the criminal justice system. Have also been selected on the adjournment in relation to Job Seekers allowance and the effect on returning to full time education.