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Dublin: 11°C Wednesday 18 May 2022

Senior Irish official says Ireland seeking wider deal to reduce debt burden

The Department of Finance however said it is too early to speculate on the outcome of ongoing discussions.

Image: Julien Behal/PA Archive/Press Association Images

A SENIOR GOVERNMENT official has told an international newswire that a deal to allow Ireland change the terms on €31 billion of promissory notes could be struck by the end of this month.

The Dublin-based official told Dow Jones he is cautiously optimistic that the agreement will free the government from paying a €3.1 billion installment on promissory notes pledged to the now-defunct Anglo Irish Bank and Irish Nationwide Building Society.

The unnamed source also told Dow Jones journalist Eamon Quinn that the promissory note rescheduling would only be the first phase of a wider restructuring of Ireland’s debts. A “retro-financing” package could include a deal on debt – including tracker mortgages – held at the core banks of Bank of Ireland and AIB.

However, the Department of Finance were not able to confirm the comments. In a statement, a spokesperson said:

As highlighted by Minister Noonan last week the negotiations on the promissory notes are progressing. This is a medium term process and it is too early to speculate on the outcome of these negotiations at this point.

Although the money which was granted in emergency loans will be paid back, there could be a delay or changes to the interest rate which would reduce the repayment burden on Ireland. Approval is first needed by Ireland’s international partners, namely the European Central Bank and the International Monetary Fund.

The Government has been in talks with the Troika since last September to try and secure better terms to repay the massive costs incurred as a result of the crippling banking crisis.

On Friday, the IMF signalled that all parties were “working hard” to make a deal on the debt possible.

Last month, Communications Minister Pat Rabbitte told the Wall Street Journal that a restructuring of the IOUs would be agreed before the €3.1 billion repayment falls due on the last day of March.

The Minister told RTÉ this morning that talks on the issue are continuing but would not be drawn on a timeline. He said a positive outcome from the discussions would be good news for Ireland.

More: Rabbitte tells WSJ: Deal to reduce Anglo burden ‘in the next few weeks’>

Read: Cabinet to discuss timing of ‘one-off’ fiscal compact referendum>

Related: IMF signals hope for deal on Ireland’s Anglo debt>

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