Details of the 85bn euro plan include: * an average interest rate on rescue loans of 5.83% * the 35bn euros allocated to Irish banks is divided into 10bn euros for "immediate recapitalisation measures" and 25bn euros as a contingency fund * the Irish Republic itself will contribute 17.5bn euros to the overall fund * the EU will contribute 45bn euros, including direct bilateral loans from the UK, Sweden and Denmark * the IMF will contribute 22.5bn euros * allows the Irish Republic to delay by one year to 2015 its deadline for reducing its budget deficit to 3% of GDP. The Irish government has also said that interest payments on all state debt will account for more than 20% of tax revenues in 2014. The deal does not require the Irish Republic to change its low 12.5% corporation tax. http://www.bbc.co.uk/news/world-europe-11855990
EU Ministers Publish Breakdown Details of Irish Emergency Loans By John Fraher Nov. 28 (Bloomberg) -- Following is a statement issued today in Brussels by European Union finance ministers: âMinisters unanimously agreed today to grant financial assistance in response to the Irish authoritiesâ request on 22 November 2010. Ministers concur with the Commission and the ECB that providing a loan to Ireland is warranted to safeguard financial stability in the euro area and the EU as a whole. âEuro-area and EU financial support will be provided on the basis of a programme which has been negotiated with the Irish authorities by the Commission and the IMF, in liaison with the ECB. âMinisters welcome the staff-level agreement on a three year joint EU/IMF financial assistance programme for Ireland. The Irish Government approved the programme on 28 November. Ministers unanimously endorse the measures announced today. âBuilding on the strong fundamentals of the Irish economy, the programme rests on three pillars: - An immediate strengthening and comprehensive overhaul of the banking system - An ambitious fiscal adjustment to restore fiscal sustainability, including through the correction of the excessive deficit by 2015 - Growth enhancing reforms, in particular on the labour market, to allow a return to a robust and sustainable growth, safeguarding the economic and social position of its citizens. âThe financial package of the programme will cover financing needs up to 85 billion euros, including 10 billion euros for immediate recapitalisation measures, 25 billion euros on a contingency basis for banking system supports and 50 billion euros covering budget financing needs. Half of the banking support measures (17.5 billion euros) will be financed by an Irish contribution through the Treasury cash buffer and investments of the National Pension Reserve Fund. âThe remainder of the overall package should be shared equally amongst: (i) the European Financial Stabilisation Mechanism (EFSM), (ii) the European Financial Stability Facility (EFSF) together with bilateral loans from the UK, Denmark and Sweden, and (iii) the IMF (22.5 billion euros each). âThe main elements of policy conditionality, as endorsed today, will be enshrined in Eurogroup and Council Decisions to be formally adopted on 6 and 7 December. The Eurogroup will rapidly examine the necessity of aligning the maturities of the financing for Greece to that of Ireland.â Annex : Distribution of the Loan to Ireland Total Programme Volume (Billions of euro) Contribution by Ireland 17.5 External support 67.5 Total 85.0 External Support Breakdown IMF (One-Third)* 22.5 Europe (Two-Thirds) 45.0 Total 67.5 European Breakdown EFSM 22.5 EFSF (Plus Bilaterals) 22.5 Total 45.0 EFSF (Plus Bilaterals) Breakdown EFSF (Effective) euro area 17.7 United Kingdom 3.8 Sweden 0.6 Denmark 0.4 Total 22.5 *Subject to the IMF Boardâs approval