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Hope on loan rates as bailout fund expands

FINANCE ministers in the eurozone have expanded the powers of the region's bailout fund, signalling the possibility of lower of interest rates and longer loan maturities.

Ireland is battling with France over its application for a 1pc point cut in the existing interest rate on bailout loans, which currently stands around 6pc.

After talks yesterday led by euro group president Jean-Claude Juncker, right, the scope of the operations of the European Financial Stability Facility (EFSF) bailout fund will be expanded.

The move has also opened the door for the fund to issue loans to countries to buy their sovereign bonds at market rates, helping to ease the weight of their national debt.

However, there are fears that contagion in Europe could spread to Italy.