THE HEAD of the group of Eurozone finance ministers has said that Ireland could be given more favourable terms on its EU-IMF bailout – though only after a deal is first reached on sharing its banking debts.
Eurogroup head Jean-Claude Juncker said Ireland had continued to make good progress under its lending deal, complementing the Irish authorities for the “steadfast implementation” of the bailout conditions and the recent moves to re-enter the markets.
“We will discuss possible improvements of the well-performing programme at one of our next meetings,” Juncker said at a press conference after a meeting of Eurozone finance ministers this morning.
He added, however, that this could be considered “once our technical discussions are concluded” – meaning any potential improvement would not be seen immediately, and could still be several months away.
The technical discussions are understood to be the talks about implementing the deal reached by ministers in June, when they agreed that the money going towards the bailout of Spain’s banks would be lent directly by the Eurozone bailout fund.
This deal is to be applied retrospectively in Ireland’s case – meaning some of the bailout funds given to Ireland for direct injection into the banking sector would be shaven off Ireland’s national debt.
Meanwhile, some of the money Ireland has put into its banking sector – including the promissory notes given to Anglo Irish Bank – could be recovered through selling those notes, or its shares in the banks, directly to the ESM.
Though a deadline of October had originally been set for this deal, the restructuring of Ireland’s debts is only likely to take case in parallel with Spain’s bailout – which the government in Madrid has been continually seeking to delay.