The Promissory Note

noodler

So regarding this..ahem.. ingenious method of delivery which will be used to recapitalise Anglo (and indeed INBS). The Minister has said umpteen times it will be money drawn down from the institution over 10+years and so will spread the cost to the Exchequer over a decent time period.

However, my understanding of such a note was that it was a promise to pay (rather than a acknowledgement of debt, like an IOU) and for accounting purposes had to be factored in as a liability in the year issued for the whole amount.

My contemporary point is back to likely deficit at the end of this year. Eurostat judged the €4bn given to Anglo last year was not an investment and so was counted in the Government's deficit for 2009.

Pat McArdle, speaking on the exhequer returns today in the Times, echoes what the DoF said said regarding the impact on the state if the €10.3bn issued to Anglo will have this year (i.e. won't all be on the deficit for 2010 as it won't all be drawn).

Is this likely to be true? I thought we had established a few months ago that sums issued to the given institutions this year would be deemed as part of the deficit regardless of Promissory note status.

noodler

Hah,

Looks like Whelan shares my concern,

http://www.irisheconomy.ie/index.php/2010/06/03/the-impact-on-the-exchequer/

(I swear I posted first!)

Bob the Builder

It disgusts me the way that the government are able to work with the EU and use mechanisms such as SPV's with NAMA so that government deficits aren't affected.

The fact that we are now using virtual credit cards and post-dated cheques that we hope won't bounce does not seem to bother EuroStat.