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IRELAND HAS BEEN given the all-clear to offload its IMF bailout debts ahead of schedule after Sweden waived its right to an early repayment.
The Scandinavian nation, which lent Ireland €600 million in 2011, was the last country to agree to the move after the UK, Germany and the other EU member states earlier gave it the thumbs up.
Ireland got about €22.5 billion in bailout funds through the International Monetary Fund (IMF), but as the economy has shifted into gear again it has been trying to pay back the share with the heaviest interest burden.
That could save Irish taxpayers a potential €400 million a year in repayments as it can now repay the loans, which carried average interest rates above 4%, with much cheaper money raised on the general market.
But the plan was dependent on all its bailout lenders adding the tick of approval because of a clause in the troika’s combined €67.5 billion package.
The catch in the agreement was that Ireland had to pay back everything at once, including its longer-term, cheaper loans, if it made any early repayments, unless all the lenders agreed to overlook the condition.
Finance Minister Michael Noonan said its bailout lenders had been “very supportive” of the government’s plan to cut Ireland’s debts since the plan was first raised in September.
There are real and tangible benefits to Ireland from this transaction, and I would like to take the opportunity to thank Sweden for their continued support for Ireland,” he said.
There are savings to be had
Ireland’s borrowing costs have plunged to below 2% on the back of its return to economic growth and the much lower risk attached to its government debt.
That comes coupled with the European Central Bank’s record-low interest rates, which have meant government treasuries would effectively be paying the central lender to park their money in its vaults.
The National Treasury Management Agency (NTMA) today offloaded another €500 million in six-month bills at a yield of 0.04%.
NTMA said it received nearly four times the bids it needed to fill the quota – an indication of investors’ appetite for Irish government debt.
Ireland will still have to ask for formal approval from European financial officials before it makes the first tranche of early repayments.
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The article is very light on detail and heavy on buzzwords. The reality is business and trade is the only way the world’s poor can become less poor – poverty doesn’t need an explanation only wealth does. Trocaire and the like arent going to reduce poverty only capitalism will. Regulations and rules that are fit for a first world country would act as barriers to development for poor countries. Would China have been able to develop so quickly and lift so many people pit of poverty if they had EU standard regulations on labour etc. No of course not
Why for a change doesn’t she propose a total seizure of the “offshore” assets of these unfortunate country’s elites and their return to them under a proper Sovereign Weath fund structure, for social and economic development. Give the so called owners home currency 25 year bonds in exchange.
As for the climate change issue, that will only be dealt with when the burning of vast quantities of coal for power baseloading, is near totally replaced by new generation nuclear and combined Red Hydrogen production, like now being developed in Japan.
https://www.youtube.com/watch?v=_uTZWaJU6ho
@Nicholas Grubb: You are misinformed shout Nuclear and red hydrogen. Nuclear plants require a minimum of 15 years to build and bring on line. Even then, we have no viable option for disposing of nuclear waste. The use of red hydrogen requires a whole need infrastructure for this hazardous and explosive fuel.
Trocaire should stick to what they know and do best. They are not qualified to comment on scientific matters like climate change.
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