State to save €1bn a year under bailout rate-cut plan
Published 15/09/2011 | 05:00
affects €22.5bn that can be borrowed from the EFSM, but interest rate cuts have already been agreed on the EFSF, which could be worth another €600m, although the details have not been agreed.
Legislation allowing the original interest rate cut from the EFSF is being prepared in the 17 eurozone countries.
Unlike the commission proposal, that plan does not include a specific reduction. A final decision on how much the EFSF charges for its loans to Ireland will ultimately be left to the team managing the EFSF.
The proposals mean Ireland would have to pay less money in loan payments each year, helping to shrink the gap between how much the country takes in through the tax system and pays out annually.
However, with this year's deficit set to be around €17bn, the saving will be too small to make any real difference to the upcoming Budget.
The commission said that the proposal was expected to be approved by the Council of Ministers in the coming weeks, but with EU states increasingly at loggerheads over bailout plans, the timing can't be guaranteed.