Election may delay rates bid

THE general election may delay any decision on reducing Irish interest rates on EU loans, according to European diplomatic sources while the Fianna Fáil confidence vote on Taoiseach Brian Cowen was blamed for pushing up the cost of Irish borrowing on the markets yesterday.

EU finance ministers agreed to try to have a comprehensive revised package to help euro states that have problems raising money on the markets ready by March 24 at the latest. This could include cutting the interest rates.

There is a reluctance, however, to make changes now knowing there will be a new Government in the next two or three months, sources said. “It would be difficult to negotiate with an outgoing government. But if the new government comes into power after the March summit, it could be difficult to reopen the issue then.”