Ireland to repay billions of bailout loans early to avoid hefty interest rates
Ireland is to repay billions of euro of bailout loans early in order to avoid €150m of interest.
The IMF chief Christine Legarde today gave the green light to a government plan to repay €4.5bn earlier than planned, while Sweden will accept €600m and Denmark €400m.
The state borrowed a total of €67.5bn in 2010 to avoid bankruptcy but the €3.8bn borrowed from the UK will not be paid back early.
Minister Paschal Donohoe says it would be too expensive to break the UK’s terms.
"The agreement that we have reached with the British government then was similar to a fixed rate morgage. There was a certain rate and a break clause in it," said Donohoe.
"I've been advised on this by the NTMA that if we were to trigger that break clause and repay back to the British government, the cost of that break clause would mean no savings to us. In fact, there would be a loss," he added.
Labour spokesperson on Finance Joan Burton said that she welcomed the move today.
"The Exchequer figures up to August show that €131 million less than budgeted has been spent on interest payments.
"The reality is that multi million euro savings have already been made on the National Debt, and this will add further to it. People should also be aware that the Exchequer is carrying €20 billion in liquid cash and assets," said Burton.
"It is time the Irish people saw the benefit of these savings," she added.
