FINANCE Minister Brian Lenihan conceded yesterday that it may be possible to negotiate a lower interest rate on the country's €85bn bailout as Europe's finance officials held closed-doors discussions on a raft of measures, including cheaper loans to some countries, aimed at protecting the euro.
Ireland has agreed to pay an average rate of 5.8pc for the money it is borrowing from Europe and the IMF.
The money being borrowed from Europe is more expensive than money coming from Washington but the interest charged by Brussels and Frankfurt could be lowered if all 27 European Union member states agree.
Some economists argue the 5.8pc rate is so high Ireland will never be able to repay its debts.
Mr Lenihan told Fine Gael's finance spokesman Michael Noonan it was "theoretically possible" for any future government to renegotiate the interest rate charged by Europe, although the rate charged by the IMF could not be changed.
The comments came on the same day that €5bn from Europe was paid to the National Treasury Management Agency, the first installment of the much larger bailout.
Mr Lenihan will be travelling to Brussels next week to meet European counterparts for discussions on the new rescue proposals which are also believed to include debt buybacks and guarantees against excessive debt as part of a package to quell the financial crisis.
The plan, which may include a loan to Portugal of about €60bn and purchases of outstanding Greek debt, would mark an attempt to contain a crisis that has frustrated unprecedented efforts by policy makers to calm markets and raised questions about the health of the eurozone.
"We are saying very clearly that we believe that the financing capacity must be reinforced and the scope of the activities of the European Financial Stability Facility," European Commission president Jose Manuel Barroso said yesterday.
Economic and Monetary Commissioner Olli Rehn said "several alternatives" were under consideration for the €440bn lending facility.
The euro, down about 10pc against the dollar in the past 12 months, gained around 0.5pc as expectations mounted of a stepped-up rescue effort and Portugal staged a successful bond auction.
The debate is so sensitive in Germany that firm decisions may wait until a scheduled summit of political leaders early next month or even mid-March.
Germany said yesterday such discussions were unhelpful but Chancellor Angela Merkel added that her country was ready to help.
"Germany will do whatever is necessary so that the euro remains stable," she said.
THINGS, finally, are beginning to move. The European authorities pulled out all the stops to ensure Portugal was able to borrow on the markets yesterday. But it is becoming clear they also knew this was only a stopgap measure, and far more radical steps must be taken.