Berlin rules out easing Irish bailout terms

Germany has ruled out easing the terms of Ireland’s bailout along similar lines given to Greece earlier this week in a move that will cut its debt by €40bn

A spokesperson for German finance minister Wolfgang Schaeuble said “What was decided for Greece was absolutely necessary to put it back on track. What happened there had nothing whatsoever to do with the other programme countries.”

Finance Minister Michael Noonan said he was examining the concessions given to Greece and he hoped to get similar as the country is exiting the bailout programme next year when funding could become very tight.

A deferral of interest payments for Ireland could save the country having to find €1.25bn a year, and a cut in interest rates similar to that given to Athens could save tens of billions of euro more.

While statements by several EU ministers and its chair, Jean-Claude Juncker appeared to say they were open to moves such as cutting interest rates and extending the length of time to pay back loans, Berlin has moved to shut down any such expectation.

A senior EU source insisted there was a misunderstanding following the midnight deal, and despite a June statement about applying equal terms to all bailout countries, it was not intended to apply to all situations in perpetuity. He said that the issue would be discussed at Monday’s eurozone finance meeting in Brussels where “it will be clarified”.

This could lead to some fireworks at the meeting as Portugal’s well respected finance minister, Vitor Gaspar, was so convinced that his country, that is also in a bailout programme, and Ireland would benefit, he assured his parliament of it.

Mr Noonan reiterated yesterday that he hoped some of the easier terms would be passed onto Ireland when the country is exiting the bailout programme next year.

“We’re putting together a strategy for exiting from the programme and the troika has promised to give us a policy paper on the ways and means of exiting the programme and we’re putting a similar one up ourselves.

“In that context, we’ll evaluate everything that Greece got and if there is something that can be of benefit to Ireland to exit the programme, we’ll push that as a policy point,” he said.

The troika had promised him the paper by Christmas.

Following the meeting, Dutch and Finnish ministers, normally in favour of harsh austerity, said they would consider easing the burden on Ireland and Portugal if they asked. But the Dutch prime minister ruled out this yesterday.