Irish PM says Ireland gets 85 billion euro EU/IMF bailout loan
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Irish Prime Minister Brian Cowen said Sunday evening that his country has got an 85-billion-euro (113 billion U.S. dollars) bailout loan from the European Union (EU) and the International Monetary Fund (IMF) at an average interest rate of 5.8 percent.
"The government today agreed in principle to the provision of 85 billion of financial support to Ireland by EU member states through the European Financial Stability Fund (EFSF) and the European Financial Stability Mechanism; bilateral loans from the UK, Sweden and Denmark; and the IMF's Extended Fund Facility (EFF) on the basis of specified conditions," he told journalists.
"The country's contribution to the 85 billion euro facility will be 17.5 billion, which will come from the National Pension Reserve Fund (NPRF) and other domestic cash resources. This means that the extent of the external assistance will be reduced to 67.5 billion."
"The purpose of the external financial support is to return our economy to sustainable growth and to ensure that we have a properly functioning healthy banking system," he said at a press conference.
The finance's 50 billion euro will be made available to provide for the financing of the country itself. The remaining 35 billion euro is being provided to support the banking system: 10 billion euro for an immediate recapitalization and the remaining 25 billion euro will be provided on a contingency basis.
Cowen said the interest rate "will vary" according to timing and the market conditions in place when the funds are drawn down.
"If drawn down in total today, the combined annual average interest rate would be of the order of 5.8 percent per annum. The rate will vary according to the timing of the drawdown and market conditions," he said.
He said that under the terms of the deal there would be no change to the country's 12.5 percent corporation tax rate.
The government had "carefully considered all available policy options" and had taken advice from Ireland's Central Bank Governor Patrick Honohan, said the Irish prime minister.
He said the loans were necessary to allow the government to meet its obligations and provided funds available at cheaper rates than those available from the market.
The deal was agreed at a meeting of EU finance ministers which was attended by Irish Minister of Finance Brian Linehan. (1 U.S. dollar = 0.75221 euros)
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