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Deal to postpone repayment of €40 billion bailout for over a decade seems to be a certainty

Sync

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Big progress for the Irish govt is expected today in their efforts to postpone debt repayments as finance ministers meet today to discuss approving it, with little opposition expected. The Indo are hopeful of a "deal" being announced today, but that would seem premature.

A NEW deal on Ireland's multi-billion euro debt to the European Union could be struck as soon as today – reducing the pressure for harsh budgets in the years ahead.
Ireland received a significant boost in its bid to seek an extension to the maturities of its bailout loans last night after finance ministers of the countries that share the euro currency backed the deal.

EU commissioner for economic and monetary affairs Olli Rehn said he expected an arrangement to be concluded by next month’s meeting of finance ministers, which is scheduled to take place in Dublin.
So basically it gets the blessing today from the ministers, the Troika then work out how to execute it (Depressing once again how our finance dept can't do this work) and then they sit down next month to officially vote it through. So the "deal" would be announced next month, the intention to deal may well be called out today.

Importantly for FG (And Noonan's job), the mooted German opposition doesn't seem to be materialising.

EU deal set to postpone our
Boost for Ireland as eurogroup backs loan extension - The Irish Times - Tue, Mar 05, 2013
 


Ulster-Lad

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So he is conceding that there is No other deal or that he could not get one. He is hopeful though that he can kick the can to our grandchildren and their children maybe? Like this bit.....

A NEW deal on Ireland's multi-billion euro debt to the European Union could be struck as soon as today – reducing the pressure for harsh budgets in the years ahead.
 

ballot stuffer

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Wow. If true it is almost certainly four more years for Fine Gael.
 

Sync

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Like this bit.....
Dead right. This is not a new deal. The deal has not been done yet. Like all deals, it's done when all parties have signed the papers. That said, if the financial ministers from the EU countries agree in principle today then it's hard to see the Troika mucking things up between now and a month's time.
 

Ulster-Lad

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Dead right. This is not a new deal. The deal has not been done yet. Like all deals, it's done when all parties have signed the papers. That said, if the financial ministers from the EU countries agree in principle today then it's hard to see the Troika mucking things up between now and a month's time.
As I said, the "New Deal" is simply kicking the can down the road because there is no other deal. Wonderful :rolleyes:
 
D

Dylan2010

Give paddy an inch and suddenly everyone wants easier budgets, hay how about some pay rises all round? this country still need to get down to ~3% deficit fast. The country is still spending like a drunken sailor (apologies to drunken sailors, at least they spend their own money)
 

captainwillard

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The deal will be done because we cannot afford to pay, as evidenced by poor tax take and massive deficit.
 

Dame_Enda

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It's not just their decision. What about the ECB stance?
 

Didimus

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It's not just their decision. What about the ECB stance?
" Ireland and Portugal requested in January that the maturities of the EU portion of their bailout loans be extended. A combination of EFSM loans, which fall under the remit of the 27-member states, and loans from the euro zone’s EFSF temporary bailout fund comprised the EU’s contribution to Ireland’s bailout in 2010."
 

Ulster-Lad

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Postponing debt repayment with no increase in the interest rate reduces the NPV of the debt.
This government just does not want to be seen with the begging bowl out (2nd bailout) around the time of the Centenary. It is widely accepted we are going to need a second bailout.
 

Marcos the black

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Considering that most of you predict that the Euro won't be around in a years time, let alone over a decade away I would have thought ye'd all be delighted.. If the Euro goes belly up, this won't have to be paid back..
 

Marcos the black

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This government just does not want to be seen with the begging bowl out (2nd bailout) around the time of the Centenary. It is widely accepted we are going to need a second bailout.
..... by you...
 

Sync

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As I said, the "New Deal" is simply kicking the can down the road because there is no other deal. Wonderful :rolleyes:
It depends how it's structured. We still don't know the numbers, the interest rates, if we'll need to pay more over the time etc.

(The below are made up numbers) 40 billion needing to be paid back over 5 years at 1% results in 1 billion interest (41 to be repaid) or 8.2 billion per year.

Spreading that over 15 years you get 2.7 billion a year (if we start repaying today. Which we should).

However if the interest keeps accumulating for the intervening years, you get 3 billion in interest, or 2.8 billion a year repayment, again if we start paying today.

The numbers would be nice, of course we don't want to pay more interest than we have to, but by the same token our economy is kind of shagged without this deal, so the cost may be worth it.

But if we could get the former (Just repay the principle and the 5 year interest) then it IS a new deal, and a pretty good one given the circumstance.

Note: Got my math from here: Loan Repayment Calculator Pleeeease don't blame me.
 

ElGrunt

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Good deal if true, another step in the right direction by this government now lets all gather round and bring back Fianna Fáil, the Irish Way!!!
 


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