Struggling Ireland, Portugal lobby for assistance repayment extension
ReutersBRUSSELS--Both Ireland and Portugal asked eurozone finance ministers on Monday to extend the repayment of part of their bailout aid, Ireland's finance minister said on Monday, a move that would ease their return to normal borrowing on financial markets.
January 23, 2013, 12:01 am TWN
Ireland's Michael Noonan told journalists he and his Portuguese peer had presented a joint request for an extension of the maturity of the loans from the European Financial Stability Facility (EFSF).
“We arranged a way of presenting a joint request,” Noonan told reporters.
“If you had a term loan to build an extension to your house and you were able to convert it into a mortgage which you will extend over a long period, you can see that your repayment profile will come down. It has been referred to a group of officials to examine it.”
Jean-Claude Juncker, the outgoing president of the Eurogroup, had earlier told journalists officials would examine issues relating to the extension of maturities in the case of Portugal.
Noonan said such an extension could result in significant savings for Ireland. “We are talking about savings of a certain amount of billions,” he added.
Under its bailout program, Ireland received a pledge from the eurozone's rescue fund, the EFSF, for 17.7 billion euros (US$23.57 billion).
The European Union's separate rescue fund, the European Financial Stability Mechanism, granted Ireland a further 22.5 billion euros. Noonan said he would make a separate request for an extension to that at a meeting of EU finance ministers on Tuesday.
Ireland was locked out of bond markets in September 2010 as it wrestled with the largest budget deficit in the eurozone and struggled to draw a line under a costly bank rescue, and was the second country to seek aid from the bloc.
Its smooth return to markets would send a powerful signal that the eurozone is putting the worst of a financial crisis, that saw Portugal, Greece and Ireland bailed out, behind it.