Rengotiating the loan with Ireland

All eyes were on Greece at last week’s crisis summit in Brussels, but other indebted countries took advantage of Angela Merkel’s generous mood. In line with concessions made to Greece, the Irish secured a substantial cut in interest repayments on its bailout loan: the rate has fallen from 6 per cent to somewhere between 3.5 per cent and 4 per cent, and the loan period has been extended from seven to 15 years. This was a long-term goal of Enda Kenny’s government and the renegotiations are being heralded as a major victory.

But the matter does not end there. When Kenny first tried to renegotiate the terms of its Eurozone loan in late February, I called the Irish Treasury to ask if Ireland was seeking to lower the interest rate on its bi-lateral loan with Britain. The official I spoke to said that it wasn’t because any concession made by the Eurozone would necessarily alter the terms of the bi-lateral loan.