Deal to pay off Troika loans won't impact Budget - Donohoe
The last of Ireland's expensive IMF rescue loans are to be paid back early, under Government plans to cut the cost of the national debt.
It will mean the IMF becomes the first element of the Troika to formally complete its role in the Irish bailout.
Taoiseach Leo Varadkar said it was a "landmark" for the State.
"It's 10 years since the financial crisis began. I think this is a very significant landmark that Ireland is able to pay off in full and early all of its loans to Sweden, Denmark and the International Monetary Fund."
The remaining €4.5bn of IMF rescue loans and €600m of bailout loans provided by Sweden and €400m from Denmark, accepted by Ireland as part of the 2010 rescue, will be repaid under the proposals. Finance Minister Paschal Donohoe said a part of the bailout provided by the UK won't be paid back earlier, because it would trigger a financial penalty. "Brexit was not a factor in the decision that has been made," he said.
Repaying the loans early still has to be approved by all parties to the bailout, but that is expected to happen without complications.
The funds can be repaid with funds borrowed on the markets and State cash, such as proceeds from the sale of a stake in AIB.
"This decision will not have an impact on Budget 2018," Minister Paschal Donohoe said.
The National Treasury Management Agency (NTMA) said interest savings could be in the order of €150m between now and 2023. The annual cost of servicing the national debt is around €5.9bn.
In 2014, then finance minister Michael Noonan got support from the European Commission and ECB to pay off the bulk of the original IMF contribution to the bailout without having to repay cheaper EU emergency loans at the same time.
But the European elements in the Troika had insisted that some IMF loans not be paid back, so that the fund retained a role in post-bailout supervision.
IMF borrowing rates of close to 5pc a year remains a multiple of the around 1pc a year Ireland pays to borrow on the markets.
The lower cost and flexible terms on the European rescue loans mean there is no desire to pay them back early.