Deal in days on €3.1bn Anglo payment

Ireland is likely to seal a deal within days to avoid paying €3.1bn cash into the former Anglo Irish Bank (now the Irish Bank Resolution Corporation), setting the scene for wider talks on restructuring the sector which will take months to complete, Central Bank governor Patrick Honohan has said.

It comes as Taoiseach Enda Kenny hailed a deal which could see China swoop to buy Irish sovereign bonds and state assets.

Ireland has pushed for several months to improve its bank bailout conditions, concentrating on replacing €30bn of high-interest loans to Anglo with another instrument that would lengthen their maturity and cut their interest rate.

Mr Honohan said the schedule of payments, which requires annual payments of €3.1bn for the next 12 years, had become a source of financial risk and that a deal to sidestep this year’s Mar 31 payment of the promissory notes would likely happen within days.

The Government hopes the deal will pave the way for the ECB to give its blessing to a wider deal to restructure the sector.

Meanwhile, the strategic partnership agreement that Mr Kenny will sign in Beijing today is set to open the door for huge Chinese investment in the economy. The memo of understanding between the NTMA and the Chinese Investment Corporation is key to the deal, as Beijing is anxious for its investment arm to use the estimated €500bn it has to deploy to lessen the country’s dependency on US treasury bonds.

As the corporation has been aggressively moving in on European utility businesses such as Britain’s Thames Water, the looming sell-off of Irish state assets as part of the troika deal could prove enticing for the Chinese state agency.

When asked if key state firms would be the target for the deal, Mr Kenny said: “This is an opportunity to explore all forms of investment here. I think it’s very significant — I regard it as very important.”

NTMA chief John Corrigan was also upbeat, saying Ireland should pat itself on the back over the agreement. The Government sees the move as a key plank in its ambition to return Ireland to the bond markets at the end of next year rather than have to take out a second bailout from the troika.

When asked if state assets could be part of the corp-oration deal, Mr Corrigan said: “Everything is a possibility in this.”

Mr Kenny said he was confident his trade mission to China has secured Ireland as the preferred gateway for the economic superpower to the EU. He also added that movement on trying to lift the ban on Irish beef had been swift, with the Chinese prime minister ordering scientists to examine the feasibility of accepting the EU foodstuff, which was banned in 2000, starting immediately.

Mr Kenny also denied he soft-peddled on human rights when the prospect of Chinese money appeared.


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