Noonan stresses 'importance' of rate cut

Minister for Finance Michael Noonan said that he discussed the "importance" of an interest rate cut on the EU part of the Irish bailout during talks in Budapest today.

Speaking after meeting German finance minister Wolfgang Schauble on the fringes of the meeting of EU finance minister in Budapest that his German counterpart understood the matter.

Mr Noonan repeated his calls for a better deal for Ireland at a meeting with French economy minister Christine Lagarde as well as with German finance chief Wolfgang Schaeuble.

"We had a chat about the importance of the interest rate to Ireland," Mr Noonan said after the meeting, which was dominated by a discussion on how to help Portugal, another country that has called for an EU financial lifeline.

Greece will get a cut in the interest rate it pays on EU aid, and Ireland is likely to receive the same in June under an overhaul of the European Financial Stability Facility, the euro zone bailout fund, agreed by euro zone leaders on March 11.

"The interest rate reduction was actually conceded at the first meeting that the Taoiseach attended," said Mr Noonan.

"It is the date of the implementation of that which is in question, not the fact that the interest rate reduction will apply to Ireland as well.

Speaking earlier, Mr Noonan said the European Central Bank's commitment on March 31st to ongoing liquidity provision for Ireland’s banks was "in effect an ECB commitment to medium-term funding”.

He said there is "no big rush to recapitalise" Bank of Ireland, which has to raise €5.2 billion. Mr Noonan said Irish banks are "adequately capitalised".

Mr Noonan said it would be important to have the government's request for a reduction of the bailout rate settled before the country taps "serious tranches of money."

"Before we drawn down serious tranches of money to recapitalize the banks," it's important to have the rate issue "finalised," Mr Noonan told reporters.

He said "the formula for the Greek rate reduction was finalised" today and that the rate cut won't apply to interest already paid.