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THE REVISED TERMS of Ireland’s EU-IMF bailout deal negotiated by European leaders last week will save Ireland around €900m a year, finance minister Michael Noonan has revealed.
Speaking to the Joint Oireachtas Committee on Finance this afternoon, Noonan added that the reduced interest rate – which will be around 2 per cent lower than previously indicated – would not only apply to future Irish borrowing, but also to the €17bn the Exchequer has already drawn down.
Not only will the lower rate apply to the European Financial Stability Fund – the bailout mechanism funded by each of the 17 Eurozone members – but Noonan said he had been given informal assurances that the reduction will also apply to the European Financial Stability Mechanism, which is funded by all member states.
Lower rates will also apply to Ireland’s bilateral loans with Britain, Denmark and Sweden, Noonan added. Britain had already agreed to reduce its interest rate to slightly below that charged of the EFSF, while the terms of loans from Denmark and Sweden have yet to be agreed.
The final interest rate has yet to be agreed upon, but Noonan said it should be almost exactly the rate paid by the EFSF to borrow the loans itself – which was around 2.8 per cent when the EFSF issued bonds to fund Ireland’s bailout in January.
The IMF’s portion of the loans being offered to Ireland, which totals €22.5bn of the overall bailout, will remain at just under 6 per cent for the time being, Noonan added.
That rate would remain fixed until next year, when two-thirds of the IMF’s member states would vote to recategorise Ireland and give it a different interest rate.
The €900m savings does not include whatever prospective savings could be made from a reduction to the IMF’s interest rate.
While Ireland had agreed to “engage constructively” in discussions on a common consolidated corporate tax base, Noonan said this was not a new concession and that Ireland was not opposed to greater cooperation with its EU partners.
Only by involving itself in discussions, Noonan said, “can we be absolutely sure that all the arguments that favour our position will be brought to the table.”
This afternoon’s meeting took place in the Dáil chamber itself, as part of moves to allow other TDs to attend and to allow as many TDs as possible to attend.
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Well done at least it’s a start !
Great so what do we get out of this after all the fuckin hardship for last few years, through no fault of our own!
A Lot more Hardship Joan..the spin doctors are working overtime at the minute!
Joan…sweet f**k all
900 million in savings per annum. 4 million population. Give everybody 2.25million each, on the condition it is spent in the republic. The state will automatically recoup 21%.
Anybody agree? It would at least be fun!
I’ve spotted a serious flaw in your maths there..
That would be €225 each. Lol. Not much fun in that. Nice try though
through no fault of our own Joan???? lets be honest… who did we think we were… mothers driving their little darlings to private schools in SUVs and then heading to golf and afternoon lunch with the girls at ?50 a head… fathers driving brand new mercs and bmw’s to “business” meetings and spending 1000′s on foreign holidays and 2nd and 3rd properties.. now giving out cos they can’t afford to continue the lifestyle that they weren’t raised with but grew accustomed to…. the bankers and politicians aren’t the only ones to blame.
John
That’s was not me!
How much is paid back in the long-term?
sigh
Does that mean they can reduce the savings that need to be made next year?
No, but it might make the cuts and hikes easier to accept.
there is still a deficit of some 18Bn to be addressed so no…..
@Lisa..hahahahaha
I’ve had enough hardship, life is grim at times, a bit of fun wouldn’t go amiss, and less of the worry about the future. @Dario sorry about the language, I just find it so expressive!
I know, I know, we are having serious financial problems in this country but in light of this saving, it would be great if Ireland made a substantial donation to Somalia. Saving lives and all!
The greatest co0ntribution we can make to Somalia is to expose what brought that country to the situation its in – and if you do we’ll find that Europe was involved. Throwing money at this problem won’t solve it any more than Live Aid solved anything. It eased a few consciences and made a few middlemen rich.
is that €500m street value?
The dirty Dogs, playing with words and interest rates. cheers for that Gavin.
Gavin is that rate(6%) for the IMF correct? I thought all IMF loans came at a standard 3% rate?
Karl – I was equally surprised. I got the latest drawn-down details from the NTMA a few weeks ago and they said:
it wasn’t me either… but if we are all honest with ourselves most of us at some point had “Luxuries” that we really couldn’t afford / didn’t need
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