EUROPE has given Ireland the go-ahead to delay repaying billions of euro worth of loans, in a move that could dramatically improve the country’s finances over the next decade.
EU finance ministers agreed in principle to extend the maturity dates on as much as €40bn worth of credit that was given to us as part of our international bailout, potentially easing the pressure on future budgets.
In a statement after their meeting in Brussels yesterday, ministers from the 27 EU states said they had discussed whether they would be ready “in principle to consider an adjustment of the maturities on the loans to Ireland and Portugal in order to smooth the debt redemption profiles of both countries”.
“We agreed to ask the troika of the EU, European Central Bank and International Monetary Fund to come forward with a proposal for their best possible option for . . . these two countries for the loans,” the ministers added.
The troika is expected to present its proposal at an informal meeting of ministers in Dublin next month.
The EU’s economics chief Ollie Rehn said he was “very pleased with the agreement” and said the European Commission would “work hard to facilitate a decision on a measure that will send a strong signal of confidence in both countries in April”.
When Ireland was bailed out in 2010, the EU agreed to provide €40.2bn in emergency financing.
Those loans came from two funds – the European Financial Stability Facility and European Financial Stability Mechanism – and have been given to us in tranches since then.
So far about €34bn of it has been doled out, tied to various repayment dates. About €10.5bn is due to be handed back between 2015 and 2016 alone.
Combined with regular bond repayments, at the moment the Government has debts of more than €30bn due over those two years.
Most analysts agree that this is far too high for the country to manage without assistance.
www.independent.ie – Peter Flanagan Brussels