Bailout deal to save us billions -- Noonan
EUROZONE finance ministers have agreed in principle to extend part of our bailout loans.
If implemented, the proposal would reduce -- by billions, potentially -- the cost of repaying the debt.
Finance Minister Michael Noonan said the move could "further enhance Ireland's debt sustainability and facilitate our successful full return to the markets".
Ireland received €17.7bn from the European Financial Stability Facility (EFSF) -- comprising loans and guarantees from eurozone member states -- as part of the €67.5bn bailout agreed in November 2010.
Just over €12bn has been drawn down so far.
But Independent TD Stephen Donnelly played down the significance of the development, saying the country was forced to borrow the money in the first place on terms that was profitable to the lenders.
"It's really very galling to listen to Mr Noonan suggesting this is good news for Ireland," the Wicklow deputy said today.
"First of all, it's technically a default so the rating agencies view any restructuring of sovereign debt as a default."
Mr Noonan said if the maturities are extended the National Treasury Management Agency would not have to borrow so soon to repay the loans.
"As a consequence you'd have a reduction in interest rate going forward," he said.
"We're not talking about hundreds of millions, we're talking about savings of a certain amount of billions," he added.
Under the EFSF repayment schedule, the monies are being repaid after three years, five and a half years, seven years, 10 years, 25 years, and 29 years.
There is now real hope of an extension of these maturities but it is not clear yet by how long. In addition, a decision was being taken at today's meeting of Ecofin, which is responsible for the EU's economic policy, to examine the possibility of extending the maturities of another segment of Ireland's bailout, the European Financial Stability Mechanism (EFSM).
The offer has also been made to Portugal. The EFSM is a separate fund controlled by the European Commission.
Earlier, Mr Noonan stated taxpayers would still have to shoulder some of the cost of bailing out the country's banks.
"There'll always be an element of the sovereign having to carry some part of the burden," he said.