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Image: Brian O'Leary/Photocall Ireland

Ireland to draw down UK bilateral loan 'shortly' - Noonan

Ireland is to draw down the first €463 million of its loans from Britain in the coming weeks, finance minister Michael Noonan says.
Sep 23rd 2011, 2:02 PM 1,388 23

IRELAND IS TO draw down around €463m in loans from the British government in the coming weeks, finance minister Michael Noonan has indicated.

The loans are being provided by Britain in parallel to Ireland’s loans from the European Union and IMF.

The first batch of the £7bn loan arrangement will see Ireland borrow £403m of funds under the exchange rate fixed on Monday, which translates to around €463m.

The loans would be transferred “shortly”, Noonan said in response to a parliamentary question from Labour TD Dominic Hannigan.

Britain agreed in July to lower the interest rate on its lending to Ireland, following the lead of European heads of state when they cut around 2 per cent from Ireland’s bailout interest rate.

Osborne said at the time that the reduction from the EFSF would enable Britain to cut its own rate, “whilst ensuring all of the benefit goes to Ireland and not to higher interest rates paid to euro area governments.”

The European Financial Stability Mechanism also lowered its interest rate on Ireland’s loans this month; the IMF is expected to lower its interest rate later this year when Ireland’s membership status of the Fund is adjusted.

Bilateral loan arrangements are still being negotiated with Sweden and Denmark; Noonan said the first drawdown of those loans is due in the first quarter of 2012.

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Gavan Reilly

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