IRISH officials are optimistic about postponing a key €3.1bn payment due for the former Anglo Irish Bank at the end of this month, despite EU commissioner Olli Rehn rejecting it out of hand.
Mr Rehn insisted that Ireland must stand by its promises and pay back promissory notes.
At a press conference after a meeting of the EU's finance ministers, he said that "the principle in the European Union is, in Latin, 'pacta sunt servanda' -- respect your commitments and your obligations".
The Government has been lobbying for some time to reschedule payments, which are effectively an IOU it pumped into the country's failed banks.
However, Mr Rehn added that negotiations for the medium- to long-term solution was "a separate issue".
"The European Union is a community of law and that assumes by definition that each and every member state respects the commitments it has undertaken and this is valid in the case of Ireland as well," he said.
"Any possible negotiation on the medium- to long-term solution is a separate issue."
Minister for Finance Michael Noonan (above) previously left open that possibility, saying it was a long way to the end of the month and that nothing was ruled in or out at this point.