Deal on Ireland's promissory notes close, claims report

Work on a deal to reschedule Ireland's bank debt is close to completion, according to a media report today.

Dow Jones Newswire is reporting that a complex deal on €31bn worth of Anglo Irish Bank promissory notes is close.

A senior Irish official is quoted as being "cautiously optimistic" that a deal will be reached by the end of the month.

It is thought the rescheduled payments will lengthen the term over which the money is repaid by the State.

Any deal will have to be approved by the European Central Bank.

It is believed rescheduling payment of the notes will improve the Government's prospects of returning to the bond markets in 2013.

Peter Spiegel of the Financial Times is in Brussels is less optimistic, however.

He believes that although the European Commission might be open to the idea of a deal on our debt Germany and the ECB are not keen.

He also warned that reports vary on whether Ireland could get a deal at all, and European officials are also wary of a link to the referendum.

"As you're hearing there in Dublin, so we are hearing in Brussels, it depends on who you talk to on which day, but the overwhelming sentiment is - no near-term deal on promissory notes," he said.

"They don't want to be seen to have linked it to the referendum, and for that reason actually the referendum could play against the Irish hand in negotiations."