Friday 24 November 2017

European Commission denies new Irish debt restructuring discussions reporters

THE EUROPEAN Commission has denied reports that new discussions on restructuring Ireland’s debt pile are ongoing.

According to RTE, under the new discussions, the €67.5bn in EU/IMF/ECB 'troika' loans could be paid back over 30 years instead of 15.

A spokesperson for the European Commission said today: “It’s simply not true.”

However, since last July the repayment terms of the troika loans have already been restructured meaning longer repayment terms for some of them.

In the case of the European Financial Stability Facility loans, maturites have been extended to a mimumum of 15 - and up to 30 years.

The Government and the troika are also involved in ongoing talks about restructuring bank debt – particularly the €30bn-plus debt associated with Anglo IOUs.

And this could involve lower interest rates and a longer repayment period.

Meanwhile, a new report on the economy from the ESRI has warned that unemployment levels will remain stubbornly high next year.

And it also said the scale of eurozone woes will impact any growth here.

Unemployment will rise to 14.9pc before easing next year to 14.7pc it warned while emigration will also continue.

ESRI research officer David Duffy said the projected growth in Ireland and the eurozone as a whole is not enough to tackle the unemployment crisis.

"Given the size of the unemployment rate, the growth predicted isn't sufficiently strong enough to bring about a reduction in unemployment," said Mr Duffy.

"Much of the growth will be driven by the export side of the economy."

The report estimates that the Irish economy will grow this year by 0.6pc in GDP terms, but will remain unchanged when measured by gross national product.

Mr Duffy pointed out its 0.6pc growth prediction is slightly weaker than initially anticipated when the organisation forecast a 0.9pc increase back in February.

"It's along the lines of steady as she goes," said Mr Duffy.

"We now expect growth of 0.6pc, which is essentially a little weaker."

He said the European backdrop is "very important" in addressing the jobs issue on a domestic level.

"We continue to be of the view that the most important thing going forward is what happens internationally," he went on.

"A lot of what is needed for the economy is taking place, but what we really need is growth being generated from a growing European community.

"Part of that comes from investment, but mainly it's about activity over all that stimulates economies and generates demand."

The report claimed that fiscal stimulus in Europe is essential to overcome the current "stagnation" in Ireland.

Mr Duffy explained that a domestic stimulus plan would not lead to sustained growth because in an open economy such as Ireland, most of the impact feeds into imports.

He said for an economy to thrive, stimulus should be pumped into competitive gains and export growth

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