Ireland wins backing of Germany for early repayment of IMF loans

Noonan predicts Irish economy will grow by a better-than-expected 3 per cent this year

Ireland has won German backing to refinance part of its bailout loans, according to Minister for Public Expenditure Brendan Howlin.

Speaking to reporters in Paris, Mr Howlin said the German parliament had set a date to ratify Ireland's request to refinance its bailout loans from the International Monetary Fund (IMF).

The Government is seeking to repay up to €18 billion of its €22.5 billion loan from the IMF early, in a move that could save the Irish exchequer up to €400 million a year.

Under the terms of the bailout, however, a decision to restructure the loans must apply to all creditors. Hence, the Government will need the support of the EU element of the troika to pay-off the IMF early.


Mr Howlin said political agreement could be reached at the informal finance ministers’ meeting in Milan this week.

He also said the European Central Bank was not putting pressure on Ireland to accelerate the sale of new bonds it pledged to issue in a deal struck with Frankfurt last year that reduced the burden of State-owned bank debts.

“All those we have talked to - Draghi, Dijsselbloem, Schaeuble and others - are on board. The Finnish parliament has endorsed it. The German parliament has set a date to ratify it. Nobody is against,” Mr Howlin said.

“Of course the ECB want us to redeem it as fast as we can. They are happy with the schedule for selling back into the market. They have not connected the two issues.”

Separately, Minister for Finance Michael Noonan said he expects the Irish economy to grow by a better-than-expected 3 per cent this year.

Mr Noonan upgraded an earlier forecast for growth of 2.1 per cent and said the economy would also grow by 3 per cent in 2015 after seeing unemployment fall below the euro zone average, retail sales rise and exports rebound.

"The department of finance official figure for 2014 is we're going to grow just ahead of 3 percent and next year we'll be around 3 per cent as well," Mr Noonan told reporters ahead of a meeting of his Fine Gael party in county Cork.

"That's very strong when you look at growth rates across Europe. I can see a number of things that could see growth slip back but if it's managed prudently, you could run that for a decade and solve the problems that Ireland has."

Additional reporting by Reuters

Eoin Burke-Kennedy

Eoin Burke-Kennedy

Eoin Burke-Kennedy is Economics Correspondent of The Irish Times