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ECB chief warns us to meet debts

IRELAND must continue to meet its contracts on commitments, European Central Bank president Mario Draghi has warned as he maintained a cautious public stance on the Government's effort to restructure some of its banking debt.

Ireland last week won some breathing space by avoiding the immediate payment of €3.1bn due on the IOUs, settling the bill by issuing a 13-year bond instead of paying cash.

Mr Draghi described last week's bond swap arrangement as "a completely Irish affair", which the ECB was not a part of.

However, he would not be drawn on the likelihood of a deal to ease the country's funding burden.

Mr Draghi said the ECB expects Ireland to make future repayments on the promissory note according to the agreed schedule after he noted last week's operation to swap the promissory note repayment for a Government bond of equivalent value.

And he insisted that there should be no delay on the current repayment schedule.

"We expect that future redemptions will be met according to the schedule to which the Government has committed itself," said Mr Draghi.

"It is of the utmost importance that the commitments of the Irish State are met in line with standing contracts and agreements."

The ECB have held interest rates at a record low of 1pc, resisting German pressure to flag an exit from its crisis-fighting mode while support measures take full effect and support an increasingly shaky recovery.