Minister for Finance, Michael Noonan has said that his European Union counterparts have given their political consent to Ireland repaying up to €18bn in loans to the IMF early.

The Government has been lobbying to waive a legal condition that all parts of the EU-IMF bailout be repaid according to the original timetable.

The waiver will now allow the State to repay the loans early and to replace them with much cheaper loans raised on the international market.

The Government is hopeful that the National Treasury Management Agency will be in a position to refinance the first tranche of IMF loans by the end of this year.

This is a significant agreement which has the potential to yield interest savings of over €1.5bn over the five year period.

All 27 EU finance ministers gave their political consent to Ireland.

Interest rates are currently much lower than when the loans were agreed as part of Ireland's bailout in 2010.

The EU is looking for ways to marshal billions of euros into its sluggish economy.

The aim is to do so without getting deeper into debt.

It is casting the net wide to consider options from a pan-European capital market to a huge investment fund.            

Finance ministers from the bloc's 28 countries are fleshing out a host of ideas circulating in European capitals.

With interest rates already at record lows, ministers need radical steps to help growth at a time of near record unemployment.

From Poland's €700bn "European Fund for Investments" to the European Central Bank's plan to resurrect the EU's market for asset-backed securities.

Europe's ability to get credit flowing to small companies is central to its economic revival.

The European Union's economy, which generates about a quarter of global output.

It grew by just 0.1% last year and its jobless rate is almost double that of the US with around 25m people unemployed.

Investment is the new buzz word among ministers, overriding the German mantra of budget cuts.

Germany is under growing pressure from partners like France and Italy to loosen the fiscal reins and use its overflowing government coffers to ramp up public investment.

But German Finance Minister Wolfgang Schaeuble this week rebuffed calls for Berlin to spend more to boost the eurozone economy, which showed no growth in the second quarter as recovery stalls.

In a speech in Milan, ECB President Mario Draghi described business investment as "one of the great casualties" of the financial crisis, saying it has fallen 20% since 2008.

The incoming president of the European Commission, Jean-Claude Juncker, wants a €300bn investment programme to revive the European economy.

Unlike in the US, European companies rely on banks to provide 80% of loans, but banks are reluctant to lend following the worst crisis in a generation.

In Italy, Europe's fourth-largest economy, credit to companies has shrunk by more than €70bn since mid-2011 and is still contracting, central bank data shows.

That problem is mirrored across Europe, holding back the recovery because smaller companies provide two out of every three private-sector jobs in the EU.