TAOISEACH ENDA KENNY has admitted that Ireland faces challenges in securing an agreement with the European Central Bank on a deal to avert the annual payment of over €3.06 billion under the promissory note arrangement.

Kenny told the Dáil that discussions on a securing a deal to avert the repayment – with the next one due in 60 days’ time – would be challenging, saying the current arrangements were “not an easy situation to unravel”.

“If this were a simple issue to untangle, it would have been done long ago,” Kenny said.

Answering questions from Fianna Fáíl’s Micheál Martin, Kenny said the government had been seeking to discuss “the source of funding, the duration of the notes, the interest rates applicable, and all of that,” with the ECB.

“I’ve been very clear in saying that what we want to do, effectively, is restructure and re-engineer this” from a “high interest rate overdraft to a long-term, low interest rate mortgage.”

The Taoiseach said he ‘expected’ a conclusion to these talks by the end of March, when the next repayment is due, and seemed to dismiss reports from last week that the ECB had rejected Ireland’s preferred option – of replacing the promissory note with a long-term bond – as illegal.

Read: Doherty asks Noonan to have “frank and open debate” on promissory notes