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Noonan begins EU tour to secure €375m savings annually in new debt deal


Minister for Finance Michael Noonan

Minister for Finance Michael Noonan

Minister for Finance Michael Noonan

SECURING a deal to repay a portion of Ireland's IMF loan early will make the country's debt more sustainable and give security to people in their jobs and pensions, Finance Minister Michael Noonan has claimed.

But after the first leg of a whistle-stop tour of European capitals to seek approval for the plan , Mr Noonan cautioned that it was still early days as he needed the support of all European countries.

The minister has said taxpayers could save up to €375m per year if the State was able to pay-off a share of the International Monetary Fund (IMF) portion of the €67.5bn bailout early using cheaper market funding.

Mr Noonan met EU interim Economics Commissioner Jyrkin Katainen today in Brussels, before holding further official meetings in Luxembourg, The Hague and Frankfurt tomorrow.

He will also be holding a series of meetings with EU finance ministers gathering in Milan at the weekend.

The minister said a deal makes "absolute common sense" and said the Commissioner was supportive.

"There is no disadvantage that I can see to any of our colleagues or any of our member states from acceding to this request, " Mr Noonan said.

The IMF said last month that Ireland can repay its bailout loans early free of charge.

But doing so would automatically trigger the repayment of the less onerous European share also, thereby wiping out any potential benefit.

Mr Noonan is looking for European support to allow Ireland to raise cash on the markets to repay €15bn of the more than €22bn that the Government owes to the IMF without having to repay the EU.

The IMF charges almost 5pc for loans, compared to less than 2pc on the markets.

Mr Noonan said there would be conditions attached to securing a deal, including continuing to have the IMF monitor Ireland, because not all of the loan will be repaid, and ensuring the Commission is provided with details showing that this would make our debt more sustainable.

"On the face of it, the conditions are conditions that we're quite happy to meet," Mr Noonan said.

"But there are 27 member states other than Ireland. If one of them says no, well then that's a problem. It's too early to call it."

Asked how a deal would affect the Irish public he said:  "The biggest risk to our continued prosperity is the level of the debt.

"This will make the debt more sustainable. In terms of payback to the ordinary people, more security in their jobs, more security in their pensions, more security that their children will get work in Ireland. "

Mr Noonan also said there was no link between this and the accelerated sale of bonds that are held by the Central Bank and which replaced the controversial Anglo Irish Bank promissory note last year, amid reports that the European Central Bank feels the Government isn't moving fast enough on that issue.

Mr Noonan, who is due to meet ECB president Mario Draghi tomorrow, said he can not commit to sell the bonds quicker as it's a matter for the Central Bank. He said Mr Draghi was likely to raise the issue, however.

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