DUBLIN, July 25 (Reuters) - Ireland is taking soundings on whether its European Union partners would allow it to repay bailout aid early, but only the loans provided by the International Monetary Fund, the Irish Times said on Friday. Such a move would allow Ireland to cut its debt servicing costs but could in theory penalise other EU states by making them wait longer for repayment of funds they granted. Irish Finance Minister Michael Noonan said earlier this month he was considering how Ireland could repay the IMF loans early, but that such a move would also trigger early repayment of EU funds. Ireland, which completed its three-year EU/IMF aid programme last year, returned to bond markets in January 2012 and borrowed 10-year debt at a record low of 2.32 percent last month. [L6N0PL26B] Its IMF loans have an average maturity of seven years and are due to be paid back in instalments from July 2015 to December 2023. Their average interest rate exceeds 4 percent. The repayment schedule on the EU loans, which carry lower rates of interest, was initially similar. But member states agreed to extend the maturities last year. Officials in Dublin have been assessing the appetite among member states to sanction early repayment of only the IMF funds before a formal application seeking a sign-off from EU countries is made, the Irish Times said, without citing sources. The possible benefit to Ireland of such a refinancing could be up to 600 million euros, Goodbody Stockbrokers chief economist Dermot OLeary said in a note. The finance ministry said all options were being looked at regarding debt sustainability but no decision had been made. Technical issues are considered as a matter of course, a ministry spokesman said in a statement. This review process can include contact with other authorities to assess that their understanding of the position on the loans is the same as ours. A spokesman for the European Commission said Ireland had so far not submitted any request for early repayment of loans granted under the EFSM rescue fund.
Posted on: Fri, 25 Jul 2014 11:52:18 +0000
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