EcoFin ministers approve Irish loan extensions

Friday 12 April 2013 18.05
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Eurogroup chairman Jeroen Dijsselbloem congratulates Ireland on steadfast progress
Eurogroup chairman Jeroen Dijsselbloem congratulates Ireland on steadfast progress
Irish loans set to be extended by seven years, pending approval  by EcoFin ministers
Irish loans set to be extended by seven years, pending approval by EcoFin ministers

Ecofin ministers have joined their Eurogroup colleagues in agreeing to lengthen the maturities of loans to Ireland and Portugal by seven years.

This will be subject to national procedures, and requires that both countries continue to successfully implement their bailout programmes, which must be confirmed by the Troika.

Earlier euro zone finance ministers agreed to extend the maturities of Irish and Portuguese bailout loans.

There had been some concern that the rejection by the Portuguese supreme court of pay cuts for civil servants would delay the decision, but assurances by the Portuguese that they will find other cuts in the next few weeks seem to have been accepted.

Speaking at a press conference in Dublin Castle earlier, Mr Dijsselbloem said that the ministers had discussed the ninth review of Ireland's bailout programme and he congratulated the country for its continued steadfast progress in implementing the programme.

He said that Ireland is a living example that adjustment programmes do work, provided there is a strong ownership and genuine commitment to reforms.

EU Commissioner Olli Rehn said the extension of Irish bailout maturities is another important step on the road to exiting the programme.

Mr Dijsselbloem said he expects the deal will be signed-off by national parliaments in EU member countries within a week.

However, he said there was "no conclusion" on legacy debt at the discussions.

Earlier, Mr Dijsselbloem said that Slovenia's financial problems are not on today's Dublin agenda. Large amounts of bad loans in Slovenia's banking sector have raised concerns in the markets that the country may be the next in line after Cyprus, Spain, Portugal, Ireland and Greece to require a euro zone bailout.

But while euro zone finance ministers, meeting in Dublin, will discuss all the other problem countries in the 17 nation euro zone, Slovenia will not be discussed. 

Tomorrow ministers will look at more information sharing between tax authorities. The sharing of information is to combat tax evasion.

But Austria has vowed today to stick to its bank secrecy laws. It is defying pressure from Germany to follow Luxembourg in agreeing to automatically exchange information on EU depositors with other EU countries to help clamp down on tax evasion.

"Austria sticks to bank secrecy. We fight tax evasion and money laundering. I don't expect any uncomfortable questions," Austria's Finance Minister Maria Fekter said, adding she did not consider that automatic exchange of information with EU countries was not necessary.

EU leaders to discuss tax evasion at May summit

European Union leaders will discuss tax evasion at their next summit in May, the president of the European Council said today.

He underlined the need to combat an issue that causes up to €1 trillion of lost income in the EU each year.

''Tax evasion is unfair to citizens who work hard and pay their share of taxes for society to work," Herman Van Rompuy said in a statement.

"That's why I have decided to put it on the agenda of our next meeting of the European Council on the 22nd of May. We must seize the increased political momentum to address this crucial problem."

Van Rompuy said around €1 trillion was lost in EU member states each year because of tax avoidance.

"To give you an idea, €1 trillion is about the same as the entire GDP or total income of Spain, the fifth biggest economy of the European Union," he said. "And it is one hundred times more than the loan that was recently agreed for Cyprus," he added.