Commissioner for Economic & Monetary Affairs Olli Rehn has said in an interview with The Sunday Business Post that the EU bailout package should be made more flexible to help Ireland recover faster.
Mr Rehn has called for the interest rates on Ireland's loans and the maturity of the debt to be lengthened.
Eurozone finance ministers agreed earlier this week to lengthen the maturity of debt and lower the interest rate on loans from the European Financial Stability Facility (EFSF), the eurozone's rescue fund, in an attempt to bring the bloc's debt crisis under control.
The State is borrowing €17.7bn from the EFSF and €22.5bn from the European Financial Stabilisation Mechanism (EFSM) as part of its €85bn bailout from the EU and the IMF.
€17.5bn of the State's own funds are being contributed towards the bailout, and by 2013, interest repayments will swallow 20% of tax revenues. The average maturity of the bailout loans is 7.5 years.
The Government has been asking for lower interest rates on its European loans for months but has faced opposition from France, which wants Ireland to raise its 12.5% rate of corporation tax in return.
The Government has refused to bow to that demand.
Earlier this week, Finance Minister Michael Noonan admitted even with an agreement by eurozone finance ministers to lower the average 5.8% rate of interest on its European debt, Paris may still demand Ireland raise its corporation tax rate.
This week Moody's downgraded Ireland's credit rating to junk status on concerns over needing a second bailout when the current rescue package runs out in 2013 and private investors would likely have to take a haircut in a second rescue package.
Minister Noonan has said that the Government is planning to make a tentative return to debt markets in the second half of 2012.
