Taoiseach presents 'historic step in economic recovery' as bank-debt deal agreed

The long-term bonds that replace the promissory notes will have an average maturity of 34 years, as opposed to the seven-eight year average maturity of the promissory notes.

The first repayment of the principal sum will be paid in 2038, and the last in 2053.

Mr Kenny said it would still be necessary to reform the way our state worked, and to narrow the gap between the state's income and expenditure.

However, he said, "step by step, the Government is undoing the disastrous banking policies" of previous years.

He said the deal should "give us confidence that our goals are achievable".

"I am confident the deal will contribute hugely to the rebuilding of trust between Irish and European authorities in the management of the banking crisis," he added.

He said a "strong and determined effort" by all members of the Government had resulted in the deal.

He paid tribute to Finance Minister Michael Noonan and his staff in the Department of Finance for their "tireless work (that) should serve as an inspiration to all public servants".

The arrangement, signed off by ECB chiefs at their meeting in Frankfurt over the last 24 hours, will cancel a debt repayment instalment of €3.1bn due next month and every March for the next 10 years.

Ireland will pay an annual interest rate of 3% under the new deal.

Mr Kenny said failure to secure a deal on the Anglo debt would have meant repayments totalling €48bn over the lifetime of promissory notes.

“Step by step, this Government is undoing the disastrous banking policies that brought this State to the brink of national bankruptcy,” he said.

“The agreement has reduced Ireland’s vulnerability from the huge debts taken on by Irish taxpayers as a result of the cost of rescuing failed private banks.

“Irish citizens can look forward once again with positive expectations.”