The annual cost of servicing the debt associated with the financial sector bailout in Ireland in 2008 is estimated at about €1.6 billion, according to figures provided by Minister for Finance Michael Noonan.

This is from an expected cost of €8 billion to service Ireland’s sizeable national debt this year.

The Department of Finance has also estimated that about €41 billion of our national debt is associated with the cost of rescuing the financial sector, said the Minister in a written reply to Fianna Fáil’s finance spokesman Michael McGrath.

On the interest charge, Mr Noonan said: “Of the projected 2014 general Government interest bill of just under €8 billion, my department estimates that circa €1.6 billion relates to rescue operations in the context of the financial crisis, of which around €800 million relates to interest payable on the floating rate Government bonds used to replace the [Irish Bank Resolution Corporation] promissory notes in 2013.”

Mr Noonan added that interest payments on the floating rate bonds contribute “significantly” to the surplus income of the Central Bank, up to 80 per cent of which is paid to the central fund in the following year.

Mr Noonan said that at the end of 2013, the general government debt was estimated by the Central Statistics Office at €202.9 billion or 123.7 per cent of GDP. This is a gross figure.

“The deputy will be aware, however, that the IBRC promissory notes were cancelled in 2013, and replaced with a portfolio of eight floating rate Government bonds for a total amount of €25 billion,” said Mr Noonan. “Furthermore, the €3.06 billion promissory note instalment due to IBRC at end-March 2012 was settled with a Government bond.”

The Minister said that by the end of 2013, it is estimated that another €10 billion had been paid to the banking sector.

This excludes the €1.3 billion paid in 2012 for Irish Life, which was flipped to Canadian group Great-West Lifeco for the same amount last year. Recapitalising the sector since 2008 is put at €64.1 billion.