Guarded welcome for deal on examining payback time

A deal to examine the payback period for Ireland’s bailout loans was described as a “small step” in the overall aim of returning to borrowing on the private markets.

Both Fianna Fáil and Sinn Féin said the real issue was not changing the bailout payments but measures to ease the bank debt burden on the Irish people.

Opposition TDs gave a guarded welcome to the agreement by 27 EU finance ministers to examine the possibility of extending the maturities, or payback time, for two sources of Ireland’s bailout loan — the EFSM and the EFSF.

Fianna Fáil’s spokesman on finance, Michael McGrath, said a similar agreement was reached 18 months ago but nothing has happened since.

“In a communique on Jul 21, 2011, the heads of state or government of the euro area agreed to extend the maturity of EFSF loans to Greece to up to 30 years and it was agreed this concession be extended to Portugal and Ireland.

“While I welcome the commitment of the eurozone finance ministers to examine this, the question is why has this measure not already been implemented?”

He said the failure to include a deferral of interest payments meant the agreement is likely to have “no immediate cashflow benefit to the State”.

And he said there had been no real progress in reducing the bank debt burden, particularly the prom-issory note arrangement which will require the State to pay €3.1bn in March.

Mr McGrath said the Government should pay “close attention” to the words of the most recent IMF report “that it will be difficult for Ireland to be able to borrow in the markets at a sustainable basis without further help from its EU partners”.

Sinn Féin’s spokesman on finance, Pearse Doherty, said agreement to examine the maturity was a “sideshow” to the real issue, which was legacy bank debt. He added that any benefit from yesterdays’ deal would be in the future, and would not save one red cent during this Government’s term.