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Originally Posted by droghedasouth  To be fair to the governemnt, they are borrowing at roughly 5% to get 8% on the preference shares from BoI and AIB. As far as I can see none of this years or next years NPRF conribution will go anywhere else.
Your argument is anyway a bit simplistic - a bit like saying don't invest in a pension until you pay off your mortgage. |
We should only invest money in the NPRF when we have budget surpluses.The NPRF has been steadily losing money.So now we borrow money to put in to the fund,and then raid it to finance the banks.
I would wager that there is no way that borrowed money invested in the fund will make a profit over the next 20 years over and above the cost of borrowing that money.It would make more sense to borrow directly to fund the banks,except that the cost now shows up in the calculated deficit. But we are paying dearly for this sleight of hand.
I have no confidence at all that the banks will be able to repay at an 8%.
A deal will be done,and we will never see an 8% return.