The Government is planning to repay €8 billion in loans received during the financial crisis ahead of schedule.
The proposed repayments relate to loans provided under the European Financial Stabilisation Mechanism (EFSM) as part of the country’s EU-IMF bailout programme.
Tánaiste and Minister for Finance Simon Harris brought a memo to the Cabinet this week, which will allow the State to make early repayments on the State’s loans, in a move that could save the taxpayer an estimated €90m.
Ireland originally borrowed €22.5 billion under the EFSM, with €15.3 billion currently outstanding.
The exact details of the loan agreement will be announced in the coming days following consultation at both a domestic and EU level.
Ireland’s national debt stood at €220 billion as of last month, according to the body which manages the country’s borrowings, the National Treasury Management Agency.
Speaking on Today with Claire Brock, Mr Harris said it would be up to the NTMA to decide if the €8 billion repayment would be used to reduce the national debt.
It is understood the State is likely to replace higher interest bailouts loans with borrowings that have lower interest rates.
Mr Harris stressed that “we may actually be able to reduce the interest rate payments that this country would have to pay”.
“It does show how far this country has come – that we may well be in a position to pay back some of effectively the bail out loans earlier,” he added.
“That is good reputationally for Ireland, it is good economically for Ireland and it may well have savings for the taxpayer,” he said.
It is expected the Government will consult with the European Commission before proceeding with the plan to pay off the €8 billion of bailout borrowings.
It is expected the payment will be made before the end of the year.
In addition the money owed to the ESFM there is also a further €18.4 billion owed in debt accrued during the bailout, according to the NTMA website.
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