Ireland, Portugal May Get Debt Relief Signal in April
European Union finance ministers may next month commit to giving Ireland and Portugal more time to repay bailout loans, Economic and Monetary Affairs Commissioner Olli Rehn said.
“I hope we can conclude this work and give a strong message of confidence” when the ministers meet in Dublin in April, Rehn told reporters in Brussels yesterday.
The EU is considering easier repayment terms for rescue loans to the two nations in a bid to ease their exit from aid programs. The bloc’s 27 finance chiefs are slated to discuss Ireland and Portugal in the Belgian capital today, a day after euro-area ministers held similar talks.
Once the ministers give their assent, the so-called troika of the European Commission, the European Central Bank and the International Monetary Fund will study options for helping Ireland and Portugal return to markets for funding. The two nations received loans from two different programs: the EU-wide European Financial Stabilization Mechanism and the euro-area’s temporary firewall, the European Financial Stability Facility.
“The troika will continue to examine an appropriate and credible extension of the maturities on the early EFSF and EFSM loans, with a view to smoothing the path back to durable market access,” Rehn said.
Ireland and Portugal have sought to extend the terms of European rescue loans, saying they deserve concessions similar to those granted to Greece last year. Ireland is due to complete its rescue program later this year, with Portugal set to follow in 2014.
“Both programs are on track and performing well despite challenging macroeconomic circumstances,” Dutch Finance Minister Jeroen Dijsselbloem told reporters after chairing last night’s meeting.
Ireland’s rescue loans have maturities ranging from five years to more than 20 years, Irish finance minister Michael Noonan said before yesterday’s talks.
“Our ask is an extension of 15 years on average,” Noonan said. “We’ll see how that goes. I don’t think there’s a disposition to go that long.”
Ireland also is seeking the possibility of retroactive direct bank recapitalization from the euro area’s permanent firewall, the European Stability Mechanism, once such aid becomes available. Finance ministers are working toward a mid- year deadline for designing how the program might work.
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