Minister for Finance Michael Noonan has said the European Central Bank appears to be more eager than ever to strike a deal with Ireland over €30bn of Anglo promissory notes.
Mr Noonan said Ireland now has what he termed “very strong support at political level” to make the country’s debt more sustainable.
He declined to say what countries might have lobbied the ECB on Ireland’s behalf, but did highly praise International Monetary Fund chief Christine Lagarde.
The minister said he was no in rush to complete the deal as it might affect its quality.
He said that the next pressure point is March, when Ireland is expected to pay €3bn.
Mr Noonan said some difficulties remain in the negotiations, that he was not underestimating the complexity of the issue at stake and that the precise benefits to Ireland were unclear due to the many variables which remain.
Mr Noonan was speaking at the end of a two-day informal meeting of European Union finance ministers in Cyprus.
Yesterday, the ECB indicated that it was engaging with the Government on the multi-billion euro Anglo promissory notes.
Executive board member Jorg Asmussem stressed at a news conference that the bank was operating under what he called "heavy time pressure on the issue" - something unexpected, given the ECB's long-held reservations.
Taken together, the comments by Mr Asmussem and Mr Noonan suggest a deal on the promissory notes has taken a significant step forward.
Separately, Mr Noonan declined to comment on a newspaper interview by his Minister for State Brian Hayes, in which he said the Irish political system needs to overcome its inability to countenance budgetary cutbacks affecting older people because many of them are "very well off".
Speaking to The Irish Times, Mr Hayes said lots of elderly people told him they were "well off" because they did not have mortgages and he was sure that Minister for Social Protection Joan Burton of Labour would look at the issue ahead of the Budget.
Mr Noonan said he had not read Mr Hayes' comments in full and therefore would not be commenting on the matter.
Asked if he believed in the principle of means-testing older people, Mr Noonan declined to answer.
No bank supervision deal by deadline - Swedish FM
Earlier Sweden's Finance Minister Anders Borg said there is virtually no chance there will be an agreement on how Europe's banks are to be supervised by the target date of the end of the year.
Speaking at the end of the Cyprus talks, Mr Borg said there was a lot of support for Sweden's position among the ten EU countries not in the eurozone.
Under European Commission plans, the ECB would take over a supervisory role over all EU banks.
However, Germany has argued the ECB should have a more limited role - solely focused on bigger banks which pose a systemic risk to the financial system.
The President of the European Commission, Jose Manuel Barroso, however countered that the financial crisis has proven that small banks can have huge ramifications when they fail.
Speaking this lunchtime, Mr Borg said the only way a plan for supervising banks could be agreed in the short-term, was if the Commission proposals were scaled back dramatically.
He said it was not acceptable that the ECB would have a role over Swedish banks when the country is not in the eurozone and Swedish taxpayers' money had to be protected.