Kenny: Summit deal good for Ireland

The Taoiseach Enda Kenny has hailed the Eurozone deal good for Ireland, claiming up to €800m a year will be shaved from the cost of Ireland's bailout.

The interest rate has been cut from around 6% to 4% and the repayment period has been doubled from seven and a half years to 15 years.

The deal forms part of a wider new €109bn Greek bailout designed to draw a line under the country's debt crisis.

“I am relieved to the extent that the conclusion of this meeting is good for our people and good for our country,” he said.

“We got a good conclusion to this meeting.”

Ireland’s bailout breakthrough will be seen as a coup for the Taoiseach, who resisted French and German pressure for a hike in the country’s controversially low 12.5% corporation tax rate in return for movement on the interest rate.

Asked if the corporation tax rate issue was now closed, he said: “It’s over. C’est fini.”

Mr Kenny said the issue did not come up at the emergency summit with French president Nicolas Sarkozy.

“There are no conditions attached to the interest rate reduction,” he said.

The deal forms part of a wider new €109bn Greek bailout designed to draw a line under the country’s debt crisis.

It also attempts to finally ensure the stability of the single currency and stave off debt contagion from spreading to larger European economies like Italy and Spain.

Focus shifts today to the international money markets and whether they rate the agreement credible enough to mark a turning point in the crisis facing the eurozone.

The deal comes just a week after ratings agency Moody’s downgraded Ireland’s credit rating to junk status, prompting criticisms from the Irish government and European Commission president Jose Manuel Barroso.

Under the deal, private investors will also provide €37bn to Greece, but there will be no private sector involvement in Ireland and Portugal.

Fianna Fáil said the interest rate reduction was to be welcomed, but said it needed to be clarified whether it applied only under the EFSF.

Michael McGrath, public expenditure spokesman, said: “Hopefully these important measures agreed by the Eurogroup will finally convince investors that Europe will take whatever action is required to address this crisis.

“The verdict of the markets will be the litmus test in that regard.”

Sinn Féin’s finance spokesman Pearse Doherty said the deal was a missed opportunity.

“While any reduction in the interest rate is welcome this does not represent a significant gain for Ireland,” he said.

“With our national debt set to exceed €200bn by 2014 this interest rate reduction will do nothing to address our national debt.

“The only way to reduce this debt is by burden sharing with senior bondholders and loss sharing with the ECB.”