Promissory note deferral may lead to spending cuts

The country may yet have to pay a high cost for the deferral of the €3.1bn promissory note payment as the ECB is deeply unhappy with the deal and the extra cost to the exchequer may have to be made up in government spending cuts.

The Government will have to show the troika when they return next month where it will find the extra €90m the arrangement involving the Bank of Ireland has cost.

The ECB is deeply sceptical of the deal, believing it comes very close to breaking its rules against funding governments, and has warned that more funding for the banks is unlikely.