European finance ministers reach agreement on Irish loans

Seven year extension of bailout a 'significant step' on full return to markets - Noonan

Fri, Apr 12, 2013, 17:39

"The ministers of the euro group would like to take a definite and positive decision on this extensionof the maturities of the loans by seven years pending the decision of the Ecofin colleagues later this afternoon, of course provided they continue successful to implement their programme as to be confirmed by the troika," he added.

EU Economics Commissioner Olli Rehn welcomed the extension of maturities, which will also apply to Portuguese bailout loans. "This is another very important step forward towards a sustained return to full market financing for both countries," Mr Rehn said.

"Of course it is crucial that both Ireland and Portugal continue along the path of determined programme implementation because ultimately the combination of growth enhancing structural reforms and consistent fiscal consolidation that will firmly reestablish investor confidence and ensure that the Irish and Portuguese people can put this very hard crisis behind them and move on to sustained growth and job creation.

European finance ministers and central bank governors have gathered for the first of two days of informal meetings of the Ecofin group in Dublin.

While the outline of a deal is being discussed in Dublin, a final decision on Ireland and Portugal's bailout loans will not be taken until the May meeting of European finance ministers, Mr Noonan confirmed earlier this week.

Other issues on the agenda are the creation of a European banking union and strengthening financial stability in the euro zone. "Banking union will further reinforce financial stability by diluting the link between banks and their personal sovereign, accordingly the Commission believes that the timeline for establishing a banking union should be as short as possible,"Mr Rehn said ahead of the talks.

The meeting will also provide finance ministers with the first opportunity to discuss the fallout from the Cyprus bailout debacle which has seen bank depositors targeted for the first time.

Responding to reports that Cyprus will have to find another €6 billion from its own resources for its programme, Mr Dijsselbloem said there was “no surprises” in the situation.

A number of groups are planning protests to coincide with the meeting. Representatives of the Garda Representative Association have been outside protesting with placards since 7.30am, while the Campaign Against Home and Water Taxes say thousands will march on Dublin Castle tomorrow in a show of opposition to property tax and austerity.

Additional reporting Bloomberg

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