IRELAND WILL HAVE to borrow around €20 billion less than expected over the coming decade, thanks to deals delaying the repayment of Ireland’s bailout loans.
That’s according to finance minister Michael Noonan, who has welcomed today’s news that the EFSF fund is delaying the repayment dates for nearly €15 billion in loans that Ireland has drawn down.
The decision made by the fund’s board of governors today follows that of the similar EFSM fund last week, which postponed the repayment of the €21.7 billion Ireland has borrowed from it.
The two funds, between them, are responsible for around €40 billion of the total bailout package, worth €67.5 billion, which Ireland is receiving from Europe, the IMF, the UK, Sweden and Denmark.
The European loans were due to start maturing in two years’ time – with a €1.27 billion repayment due in February 2015, a €5 billion repayment due in December 2015, and a €4.19 billion repayment in July 2016.
Delaying the repayment dates by an average of 7.5 years means Ireland needs to borrow less on the open markets – and should therefore be able to expect a lower interest rate when it tries to leave the EU-IMF package later this year.
“This builds upon the successful promissory note negotiations which reduced the market refinancing requirement by €20 billion over the next 10 years,” Noonan said in a statement this evening.
“Taken together, the successful conclusion of both sets of negotiations has delivered a cash flow benefit of €40 billion over the next decade and will further strengthen our ability to make a full and sustainable return to the markets.”
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