The European Union will discuss lowering the interest rate on emergency loans to Ireland as part of its comprehensive response to the sovereign debt crisis, Economic and Monetary Affairs Commissioner Olli Rehn said today.
'We have a common goal for Ireland to revive its growth dynamic and succeed in ensuring debt sustainability,' Rehn told a news conference in Brussels.
'Pricing policy, I am referring to the interest rates, is one key issue here which will be discussed in the context of the comprehensive strategy of the European Union,' he said.
The European Union and the International Monetary Fund agreed on a €85 billion emergency loan package with Ireland last year to help cover the country's financing needs.
ECB bought fewer bonds last week
The European Central Bank slowed the pace of its bond purchases last week, as the premiums investors charge to buy the debt of the euro zone's troubled periphery members hit the highest level in over a month.
The ECB said it had finalised the purchases of €369m worth of bonds in the week to February 25, compared with €711m the previous week, taking the programme's current overall value to €77.5 billion.
Bond market traders have reported that the ECB has been intermittently buying Portuguese debt over the last few weeks as spreads of those in the debt spotlight such as Greece, Ireland and Portugal have crept steadily higher.
The purchases are part of efforts to stave off Europe's debt crisis and get markets back into order. The ECB can buy government and corporate bonds from banks and other investors - but not direct from governments - under the programme, but has given no further details, such as how much it could spend or how long it intends to buy for.
Since the purchases take 2-3 days to be finalised, it is likely that the settled amount includes purchases made over a week ago but not the most recent ones.
The programme remains a source of controversy, with opponents saying it treads dangerously close to the ultimate ECB taboo of financing governments.
Speculation is growing that the ECB would shelve the programme if Europe's rescue fund, the European Financial Stability Fund (EFSF), is also given the power to buy bonds.
