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14/09/2011
€600m To Be Saved With Better Loan Terms
Ireland is to receive better terms for another set of loans to be given to the state through a European bailout scheme.
The European Commission has adopted two proposals that will see Ireland receiving lower interest rates and extended maturities on loans.
It is understood that these proposals could save the State up to €600m a year in interest payments.
This comes under the European Financial Stabilisation Mechanism (EFSM) with approval expected by the council within the next few weeks.
The EFSM is contributing around €22.5bn to the €85bn Irish bailout deal, with the Irish Monetary Fund (IMF) and European Financial Stability Facility (EFSF) also providing around €22.5 billion each. The remainder of the bailout fund is provided mainly through bilateral agreements.
These new proposals are separate from the reductions in Ireland's interest rates agreed in July by EU leaders.
Interest rates paid by Ireland will be reduced to bring them in line with the cost to the EFSM of borrowing the money. This means Ireland will no longer pay an additional 2.9%.
The maturity of the loans will be extended from the current maximum of 15 years to up to 30 years.
Given that the proposals are passed it is predicted that the National Treasury Management Agency (NTMA) will find it easier to organise a repayment schedule and the amount that has to be re-financed each year will be reduced.
This should also make it easier for Ireland and banks to borrow from financial markets.
(LB/GK)
The European Commission has adopted two proposals that will see Ireland receiving lower interest rates and extended maturities on loans.
It is understood that these proposals could save the State up to €600m a year in interest payments.
This comes under the European Financial Stabilisation Mechanism (EFSM) with approval expected by the council within the next few weeks.
The EFSM is contributing around €22.5bn to the €85bn Irish bailout deal, with the Irish Monetary Fund (IMF) and European Financial Stability Facility (EFSF) also providing around €22.5 billion each. The remainder of the bailout fund is provided mainly through bilateral agreements.
These new proposals are separate from the reductions in Ireland's interest rates agreed in July by EU leaders.
Interest rates paid by Ireland will be reduced to bring them in line with the cost to the EFSM of borrowing the money. This means Ireland will no longer pay an additional 2.9%.
The maturity of the loans will be extended from the current maximum of 15 years to up to 30 years.
Given that the proposals are passed it is predicted that the National Treasury Management Agency (NTMA) will find it easier to organise a repayment schedule and the amount that has to be re-financed each year will be reduced.
This should also make it easier for Ireland and banks to borrow from financial markets.
(LB/GK)
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Ireland WeatherThis Evening and Tonight:It will be cloudy with a spell of heavy rain pushing south through late evening and the early hours, soon followed by some clear spells. Minimum temperature 6 °C.
