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Dublin: 3 °C Wednesday 11 December, 2019

Noonan warns bailout rate change won’t ease budget cuts

The next budget will contain further cuts of around €4bn, despite the country saving millions on its bailout loan payments.

Image: Sasko Lazarov/Photocall Ireland

LOWER INTEREST rates on Ireland’s bailout loan will not affect the government’s plans to introduce a new raft of budget cuts later this year, Finance Minister Michael Noonan has warned.

Ireland was granted a 2 per cent cut on its EU-sourced fund, while Britain’s Chancellor of the Exchequer George Osborne announced yesterday that he would cut the rate being charged on Ireland’s bilateral loan.

The potential savings for Ireland resulting from the EU interest rate cut have been estimated to reach between €600m and €900m, but Noonan last night warned that the country “will still have to face the music in December”.

Speaking to RTÉ News, he said that the reductions are conditional on Ireland following its programme for deficit reduction. Going forward, he said, the rate reduction would help ease the burden of the debt.

Noonan also indicated that further state spending cuts of around €4bn will be included in the next budget.

He dismissed talks of a second bailout for Ireland, saying that the EU had agreed to continue to financially support any country which meets the conditions of its programme if it cannot return to the markets after that programme’s completion.

Questioned about EU talks over the creation of a common consolidated tax base, Noonan said that the EU was entitled to instigate a debate on such issues, but that Ireland would be protecting its interests.

After the bailout interest rate cut was agreed, Taoiseach Enda Kenny said the ongoing issues with France over Ireland’s corporate tax rate were over.

Read: Ireland 12.5, France 0: Corporate tax spat over >

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Read: UK agrees to cut interest rate on bilateral Irish bailout >

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