Ireland moved close to an accord on repaying International Monetary Fund bailout loans early, with Sweden set to become the last European Union nation to agree.
The Swedish parliament’s finance committee today unanimously proposed to allow Ireland to refinance IMF funds without triggering similar payments on its lower-cost European loans.
Sweden is the last EU approval needed, and a vote by parliament in Stockholm is scheduled for November 19, Lars Widlund, a civil servant at the committee, said by phone today.
"This is a positive development in that it removes the final technical hurdle to Ireland repaying its IMF borrowings," said Philip O'Sullivan, an economist at Investec Stockbrokers in Dublin .
Minister for finance Michael Noonan secured a provisional accord from EU counterparts in September to repay most of Ireland's €22.5 billion of IMF loans early, pending consent from individual nations.
The government may save as much as €2.1 billion by refinancing most of its IMF loans by selling bonds, according to the nation’s bailout troika.
The IMF loans carried an effective 4.99 per cent interest rate at the end of March, 1.90 percentage points more than its most expensive EU funds, according to the finance ministry.
Taoiseach Enda Kenny said on November 4 that the government is set to accelerate its plan to refinance IMF loans after it sold €3.75 billion of bonds the same day.
The nation’s debt agency sold the security to yield 2.487 per cent, a “historical low” for a 15-year issuance by the state. Kenny said that Ireland may repay an initial €10 billion of the IMF loans, having first planned a first repayment of €6 billion.
Bloomberg
