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Deadline to repay bailout loans may be extended

Eurozone finance ministers last night agreed in principle to extend the deadline for Ireland to repay its bailout loans.The decision comes following lobbying by the Irish and Portuguese governments.The 27 EU finance ministers are expected to discuss the issue at a meeting today.Final approval is expected to be reached at an EU ministerial meeting in Dublin next month.When Ireland was bailed out in November 2010, it received tens of billions in loans from several sources.The sources included the newly-established European Financial Stability Facility and some money came from the EU’s own funds.
The monies were to be paid back at different times, from as soon as three years, all the way to 29 years.The repayment schedule has been a problem, since large chunks of debt would have to be repaid or rolled over soon after Ireland returned to the market.The Government and Portuguese government want similar concessions.Both are seeking to extend the maturities of these loans by an average of 15 years.It is thought that would significantly improve Ireland’s debt profile over the next ten years.Last night, eurozone finance ministers agreed the request in principle, with the technical detail – including the length of the extensions – to be worked out by the Troika.Government welcomes proposalTaoiseach Enda Kenny has said it would be a good deal for the taxpayer.Minister for Jobs, Enterprise and Innovation Richard Bruton has said a deal on postponing the European part of Ireland’s bailout loans would be a boost for the taxpayer.He said good progress has been made.”The basic idea is to extend the maturity of the almost €14bn loans that have been provided by Europe as part of the emergency package.”If we get an extension of such maturity obviously you don’t have to go back to the market, you get it at the rate of interest that has been fixed.”It would be a very good deal for the taxpayer and take the pressure off having to go back to the market early to raise funds.”Tánaiste Eamon Gilmore said that a deal would be further progress on easing the burden of debt on the Irish taxpayer.Speaking on his way into Government Buildings this morning, he said: “We’ve come a long way from the chaos we had two years ago to the stability we are now achieving today.”He said the Government had got a reduction in the interest rate, had dealt with the issue of the promissory note and is now dealing with an extension of the maturities.However, Sinn Féin’s finance spokesperson has said the news is not unexpected and was announced in January.Pearse Doherty said anything that would extend the maturities of the bonds is to be welcomed, but it is still unclear if the loan extension will actually save money.Elsewhere, Minister for Finance Michael Noonan has said that the next budget will be in October.

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