Ireland plans to repay €8bn in bailout loans early to save on interest costs

The proposed repayment would draw on Ireland’s improved public finances and cash reserves to reduce debt owed to European institutions

Ireland had a cash and liquid asset balance of €28bn at the end of September.

Tánaiste Simon Harris said he would seek to give the country’s debt agency the option to repay €8bn in loans received as part of Ireland’s 2010 international bailout ahead of schedule.

The proposed repayments relate to loans provided under the European Financial Stabilisation Mechanism (EFSM). 

Ireland has €15.3bn in EFSM debt outstanding, accounting for just under half of the debt due to be repaid to European institutions.

“This will save money. The only reason we would do it is if it actually saves the taxpayers money on interest payments on debt,” Mr Harris told Newstalk in an interview, saying he had brought the proposal to Cabinet this week.

Ireland repaid the last of its IMF loans ahead of schedule nine years ago.

A surge in corporate tax revenue from US multinationals has transformed the country’s public finances since then, leading to large budget surpluses in each of the last four years and limiting Ireland’s borrowing needs.

The country’s debt agency also had cash and liquid assets totalling €28bn at the end of September.

The early repayment, which RTÉ said is expected to be made by year-end following consultation with the European Commission, would reduce Ireland’s national debt. 

This stood at €210bn, or 63% of modified gross national income, at the end of 2025.

 - Reuters