EU agrees to cut bailout rate and backdate it

IRELAND’s interest rate on its EU loan will be cut and the reduction backdated, following agreement by EU finance ministers on the new terms for the European Financial Stability Fund.

The new rate is due to come into force at the end of June when national governments approve the changes to the fund. It could save Ireland an estimated €330 million a year in interest payments.

The reduction will help to offset the ECB’s interest rate increase to 1.25% from 1% which will be applied to the €40.2 billion part of the loan that comes from EU funds.