It's not all about us – EU hammers out €1 trillion budget after all-night talks

THE country was beginning to see the initial benefits of the former Anglo Irish Bank/IBRC deal that will reduce borrowing needs over the next decade.

Our borrowing needs have been slashed by €20bn over the next decade, which will ease the country's own budget cuts.

It came as Taoiseach Enda Kenny was involved in another all-nighter to hammer out an EU budget deal that is worth almost €1 trillion.

Leaders of the member states said this morning that they have finally agreed on the broad framework of the European budget.

After wrangling between Britain and France the agreement was seen as another coup for the Irish presidency of the EU.

Markets have been reacting positively to the Anglo Irish Bank arrangements.

Tanaiste Eamon Gilmore said that it was just one step on the long road towards recovery.

"The people of this country have endured a lot, the adjustments that have been made, they have lost employment and have had businesses which have collapsed," he said today.

Difficult

"People are suffering as to what happened in our economy. We are going to work to bring about recovery – some of what we have done has been very difficult.

"We are going to renegotiate the terms of the bailout, to lift the burden off our taxpayers.

"Yesterday was a big step forward but it is not the only thing that we have to do. It is only one step, only one element."

International investors threw their weight behind the promissory note deal as bond yields fell to pre-crisis levels.

Irish bond yields plummeted around 17 basis points for the 10-year yield – its lowest level since 2007.

The October 2020 Irish bond yield fell as low as 3.952pc, the lowest since before the crash.

It improves Ireland's prospects of exiting the bailout and increases the chances that the economy will return to healthy growth in the coming years.

Economists anticipate that the reduction should boost Irish economic growth by around 0.5pc next year.

The European Commission President José Manuel Barroso has praised Ireland for taking the brunt of pain to help avoid a complete crash of the European banking sector.

Bailout

Mr Gilmore said that because Ireland holds the presidency of the European Union, the Government is very much in charge of the discussion about the bailout terms.

"The terms are immensely better, our borrowing requirement is down," he said.

"By any standards, this is a good outcome for Ireland but there is more work to do in terms of getting a full economic recovery."

clairemurphy@herald.ie