Debt Crisis: Ireland gets €650m saving on bailout loans
The margin on our borrowings from the European Commission part of the EU/IMF €67.5bn bailout loans has been reduced to zero.
The reduction works out at savings of up to €650m per annum depending on the amount of money drawn down from the fund.
We will also have twice as much time, or 30 years, to pay back the €22.5bn part of the loan from the European Commission following a decision in Brussels.
“In addition to the substantial cash savings for Ireland and Portugal, the new financial terms will bring benefits such as enhanced sustainability and improved liquidity outlooks,” the Commission said in a statement today.
“Moreover, indirect confidence effects through the enhanced credibility of programme implementation should result in improved borrowing conditions for the sovereign as well as the private sector.“
The decision, approved by the Commission this morning, covers money from the European Financial Stabilisation Mechanism (EFSM) and is separate from the reductions achieved in July.
It means that we will no longer pay an additional 2.9pc interest and will apply to money already drawn down by us.
The reduction will apply to money already drawn down by Ireland. The average term of the loans is also being extended from the current 7.5 years to 12.5 years.
The EFSM is contributing €22.5 billion to Ireland's bail-out package. Ireland has drawn down €11.4 billion from the fund so far.