Draft proposes lower interest rates on EU bailout

Ireland looks set to benefit from a cheaper interest rate and a longer term to repay the EU portion of its bailout loan.

The proposal, which will also benefit Greece and Portugal, forms part of a draft emergency plan being discussed by EU leaders in Brussels today.

According to senior Irish sources, Ireland is to receive a lowering of the interest rate it pays on the EU part of its bailout.

In addition, longer maturities on the loans are to be provided, easing the pressure on the Exchequer further.

According to a draft agreement seen by news agencies, other changes to the European Financial Stability Facility - the mechanism from which Ireland accesses its bailout funds - include calls for an extension of bailout loans for Greece from the EFSF to 15 years from seven at a rate of 3.5%.

Today's meeting was called in a bid to halt the contagious effect of the Greek debt crisis on the rest of the eurozone by arranging a second bailout for the debt-laden country.

Any decision on the second bailout deal is also likely to involve private sector burden-sharing, at the insistence of Germany.

Senior Irish sources say it is only right that Ireland is rewarded for its fiscal discipline following its bailout last year.