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Europe may take e22bn of our debt

THE Government is hoping Europe's bailout fund will take over the State's stakes in AIB and Irish Life & Permanent, slashing our national debt by €22bn.

However, European officials are said not to favour the plan.

The plan would be for the European Financial Stability Facility (EFSF) to take over the Government's €20bn investment in AIB and its €2.7bn investment in Irish Life & Permanent.

Ireland's national debt would fall by the amount the EFSF paid for the stakes. Irish officials believe the deal is possible as the French banking crisis could lead to France's banks being bailed out directly by the EFSF.

Taoiseach Enda Kenny told the Dail that Ireland is "constantly" seeking to achieve a reduction in the country's debt burden.

Finance Minister Michael Noonan has previously confirmed that the Government will seek to have the EFSF refinance the €30m of IOUs that were issued to Anglo and Irish Nationwide for their bailouts.