Benefits of extending terms of Irish loans considered

Monday 18 June 2012 19.05
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Irish loan term set to be extended?
Irish loan term set to be extended?
Eamon Gilmore says a number of options being looked regarding Irish loans
Eamon Gilmore says a number of options being looked regarding Irish loans

Tánaiste Eamon Gilmore has said the Government has been working to extend the repayment schedule of bailout loans.

"We have been working with the Troika to see if we can get the bailout money on a longer term basis,'' he stated.

He said that those negotiations are not yet competed and that a number of options are being looked at.

''Putting a time scale on it is very difficult. It has been work we have been engaged in. I don't think there is any secret that the bailout terms we inherited were very onerous," he added.

Earlier, RTÉ News learned that the effect of making changes to Ireland's bailout in order to help it return to the markets has been considered.

At present Ireland's loans to the EU are an average of 15 years long.

The EU/IMF has said the country has been sticking to its bailout targets and sources believe the cost of borrowing for Ireland would be lower were it not for the intensification of the euro zone crisis.

Discussions so far have focused on changing the repayments of Ireland's promissory note. However, sources say that if the terms of the repayment of Ireland's loans were extended, it would help the country return to the markets.

Instead of paying back EU loans over an average of 15 years, sources say extending them to 30 years could help Ireland return to the markets. The issue has not yet been raised with the Irish Government or with EU leaders.

The move would amount to Ireland's official creditors taking some pain and would require political agreement, which may be difficult to secure.

Sources believe imposing losses on private bond holders in Greece has made a return to the markets by countries in bailout programmes even more difficult.

The European Commission has said that it is not planning to double the repayment term on parts of its €85 billion bailout to Ireland. ''This is simply not true," EU commission spokesman Amadeu Altafaj in an emailed response.