Monday 27 March 2017

Government 'not seeking debt restructuring'

Laura Noonan

Laura Noonan

FINANCE Minister Michael Noonan last night played down the prospect of Ireland asking for more time to repay its €67bn bailout loans, insisting the Government is not negotiating for so-called "debt restructuring".

The comments came just days after Public Expenditure Minister Brendan Howlin said restructuring the debt was "desirable" and was something the Government "will deal with".

"From a policy point of view, the only item on which the Irish Government is in negotiation with the troika at present is a possible interest rate reduction," Mr Noonan told reporters in Brussels. "There is no other item we are negotiating."

Mr Noonan added that the Government "hopes" to get Ireland "back on a growth pattern", to "fulfil the conditions of the bailout" and to return to the markets for funding "as time goes by".

"That's the policy position and we're not adding on other items," he stressed.

Ireland had been hoping to get its interest rate reduction sealed at a meeting of EU finance ministers yesterday, but the agenda was overtaken by a fresh Greek crisis in recent days.

The delay in securing a cut in Ireland's interest rate won't hurt the country unless a deal isn't sealed by mid-July, when the first interest payment on the European portion of the bailout falls due.

Sources yesterday confirmed that Ireland would have to pay the 5.9pc agreed interest rate for money from the European Financial Stability Fund on July 18, barring a rate cut before then.

Even if a deal is done later, the higher interest paid on the July instalment won't be refunded, sources confirmed.

Mr Noonan said yesterday he would raise the issue of Ireland's interest rate reduction when he updated his peers on the results of Ireland's bailout plan, but he admitted the matter was "not going to progress" at the meeting.

"The main issue today is Greece," he said. "We will do our best to get an advancement on the interest rate, but there will be no advance today apart from restating our position."

After failing to get a hearing last night, the Irish interest rate is now unlikely to be changed until the next meeting of EU finance ministers in a month's time, although a deal could in theory be signed off in the interim if a consensus is achieved.

France is still holding out, demanding changes to Ireland's 12.5pc corporate tax rate as a quid pro quo for the lower interest rate charge. "There are some individual countries looking for conditionality," Mr Noonan acknowledged.

Irish Independent

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