Noonan: Ireland will save €10bn on bailout loans

IRELAND is likely to save about €10 billion over the life of its EU/IMF loans, Finance Minister Michael Noonan has said.

The estimate is based on the cuts announced this week in interest rates to the €67.5bn EU/IMF bailout, and additional concessions agreed yesterday which Mr Noonan said could save taxpayers about €250 million per annum.

The interest on the European Financial Stability Fund portion of the bailout, which amounts to €17.7bn, had been reduced further by half a percentage point.

Mr Noonan said this, along with the cut in the overall interest rate by the European Commission this week and rate changes in July, could save the country about €1bn a year.

Ireland will also no longer have to pay a 20% “buffer” on EFSF loans, which could result in a rebate of €600m in five years.

Mr Noonan also said the country’s focus will be on cutting the cost of €30bn worth of IOUs to Anglo Irish Bank.

Mr Noonan is due to meet ECB president Jean-Claude Trichet, head of the EU’s rescue fund Claus Regling and Economics Commissioner Olli Rehn this morning to discuss more ways to cut Ireland’s debt.

The issue of promissory notes issued by the previous government was a primary one, he said, and he hoped to convince them to change the terms of these IOUs by lowering the 8.663% rate or lengthening the repayment period.

These IOUs are worth €30bn in total and the state is due to pay €3bn a year off the capital for the next 14 years.

When interest payments kick in in 2013, it will begin at €350m a year, rising to €2.15bn in 2025.

However, Mr Noonan ruled out burning Anglo bondholders.