Noonan hopes new EFSF fund will aid Anglo
FINANCE Minister Michael Noonan yesterday revealed that the Government is hoping to use Europe's new bailout fund to restructure the €29bn bailout of Anglo Irish Bank.
But Mr Noonan said it was "not clear yet" whether the ramped up EFSF fund would be "flexible enough" to be used for Anglo, even though Europe's leaders said "particularly good" progress had been made on enabling it to put capital into banks. The comments come almost a month after the minister first floated the idea of changing the terms of Anglo's bailout, which was initially done through a €29bn IOU dubbed a 'promissory note'.
Under the deal, the Government will pay the bank €3bn a year over about 14 years, including €17bn of interest payable to the bank.
Mr Noonan believes this is too much of a burden on the taxpayer and wants to restructure the arrangements.
Initially, he spoke of reducing the interest rate payable to Anglo and paying the cash out over a longer term, but yesterday he confirmed that he was also exploring using the EFSF as part of the Anglo solution.
A model could see Ireland borrow from the EFSF to pay off the outstanding amount of the bailout; that money could then be repaid to the EFSF over a longer timeframe and at a lower interest rate.
"It's a matter that I've been raising in bilateral meetings and I had done that at our last informal meeting in Poland and I had done it as well in Washington with the IMF," Mr Noonan said yesterday.
Jean-Claude Juncker, who heads up meetings of the eurozone's finance ministers, said "good progress" had been made on new EFSF instruments "especially on the recapitalisation of financial institutions".