Ireland has a "mountain of debt" that currently stands at €205 billion, some four times higher than it was in the 2000s, the Chief Executive of the National Treasury Management Agency (NTMA) has said.
Conor O'Kelly told the Public Accounts Committee that Ireland has paid €33bn in interest the national debt in the last five years, and €60bn in the last decade.
He has cautioned that "Ireland is not in a good position" when it comes to our national debt.
On a positive note, he welcomed Christine Lagarde's nomination as President of the ECB, as she is "considered to be a dovish" and the markets have already reacted positively to news of her impending appointment. He said: "The interest rate environment looks like it is going to remain low for the foreseeable future."
In his opening remarks to the committee, Mr O'Kelly said: "We have paid €33bn in interest over the last five years. This interest bill is enormous. We paid €60bn in interest over the last decade. That compares to €20bn in the previous decade. That is all to do with the elevated amount of debts rather than the rate of interest which a lot of people concentrate on."
He said that Ireland relies on foreign capital for 90% of its borrowings and he acknowledged that is "unusual" for European and global sovereigns. He said this leaves us "slightly more vulnerable than others in relation to financial markets."
He said the interest bill has moved down from €7.5bn to €4.5bn and this has occurred because of the interest environment created by the ECB.
On Ms Lagarde's nomination he said: "Since Christine Lagarde's potential appointment as ECB President interest rates have fallen very dramatically further. Over the last 48 hours there has been quite a dramatic move in bond markets to yields. She is considered to be a dovish, potentially, ECB President versus some of the alternatives and the market has reacted and moved rates even lower. So the interest rate environment looks like it is going to remain low for the foreseeable future.
"Because this extraordinary low interest rate environment happened when this environment had its greatest refinancing needs and at a time where the credit rating of the country was improving, those three things came together and that environment is what allowed Ireland save so much interest."
He said that Ireland's gross debt has remained unchanged since the financial crisis and stands at €205bn, and that is "four times what it was in the 2000s and I describe this as a mountain of debt".
"There is only one way to get down a mountain and is very slowly and very carefully and not take any alternative routes and not to go back up the mountain.
"We have to try and find a way to reduce this debt over time. It will only happen very slowly but we have got to stick to the path and do that because the risks to the country of having very high debt levels are the risks that any household or business would have of carrying high risk."
He said that Ireland's debt to Government revenue stands at 251%, one of the highest in Europe and our interest bill, even though it has come down, as a percentage of Government revenue stands at 6%. "That is still way higher than our European peers, even at today's interests, even with savings we have had, that is where it still ranks.
"Ireland is not in a good position from a debt point of view," he said.
Sinn Féin's David Cullinane asked: "Before the crash came it was about €40bn and it is now €205bn. So the vast majority of it is crash or austerity-related, either through bank recapitalisation or through servicing state expenditure."