EUROZONE FINANCE MINISTERS have agreed in principle to extend the deadline for Ireland to repay the EU portion of its bailout loan.
Finance ministers from all 27 EU member states will meet later today to consider a deal agreed in principle by the eurozone ministers last night that could apply to Ireland and Portugal’s bailouts and could save billions of euro in the short term.
Ireland has in recent months been pushing to extend the repayment periods of the €17.7 billion it drew down from the European Financial Stability Facility (EFSF) when it entered the bailout programme over two years ago.
In addition it has also been pushing to extend the repayment period of the €22.5 billion received from the European Financial Stability Mechanism (EFSM).
The proposed deal on the €40 billion would see the first maturity date pushed out beyond the current December 2015 when the State is due to make its first full repayments.
Any deal would mean that the State would spend longer repayment its debts – its currently scheduled to be repaying it until 2042 – but it would be more manageable as inflation would mean the loans would be worth less in real terms.
Finance Minister Michael Noonan has said previously that he hoped to extend the term on the loans by about 15 years which would save the State “a certain amount of billions”.
The deal would only apply to the EU portion of the bailout loan and not the money that Ireland has received from the IMF – around €19 billion – but would significantly reduce the debt burden and aid Ireland’s anticipated return to normal lending markets.
The technical detail of the proposed lengthening of the loan repayments will now be worked on after today’s meeting of EU finance ministers and final approval is expected to be reached at the next EU ministerial meeting in Dublin in April.
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