EU and IMF could make €9bn profit from Irish bailout
Published 05/07/2011 | 17:25
The EU/IMF could make €9bn over the lifetime of the €67.5bn in bailout loans being lent to this country to keep it afloat.
Finance Minister Michael Noonan described the earnings as “excessive” while speaking in the Dail today.
The strong language comes just after exchequer figures show the Government is on track to reach its budget deficit targets set out by the EU/IMF by the end of the year.
And it comes in a week that members of the EU/IMF bailout group come to Ireland for further talks.
The improved exchequer figures could give Government ammunition as it tries to convince the troika of the EU/IMF/ECB that we deserve a reduced rate on the loans.
“It is the Government’s strong position that the margin being charged on loans…..is excessive,” he said responding to questions from Sinn Fein Finance spokesperson Pearse Doherty.
“This argument, which has been supported by the European Commission, is one that I and my Government colleagues plus our officials make at every possible opportunity.
“It is safe to say that my ECOFIN – Euro finance ministers - counterparts are fully aware of this issue and I will continue to remind them and press them on this matter.”
The average interest rate on the loans, when the bailout was granted last year, stood at 5.8pc, but it fluctuates depending on the cost of borrowing on international markets and can reach higher than 6pc.
Meanwhile, German Chancellor Angela Merkel had a go at rating agencies who said yesterday that a French deal agreeing to push the repayments of Greek bonds into the future is tantamount to a default on the Greece’s debt.
She said the troika will call the shots in relation to debt-ridden Greece after the comments from ratings agency Standard & Poor’s.
“I think it's important that we in the troika don't allow ourselves to relinquish our freedom to judge,'” she told reporters at a news conference.
“That's why I trust in the evaluations of these three institutions when it comes to specific procedures' rather than those of rating agencies”
French banks are owed €53bn by Greece.