Ireland moves to trim IMF bailout borrowing costs
Ireland will probably be able to reduce the amount of money it pays to borrow in the second half of the year by returning to the markets, according to an economist.
John Fitzgerald of the Economic and Social Research Institute (ESRI) said that the State will be able to borrow money more cheaply from the private sector because the promise of an €85bn (£71bn) bailout means that lenders know that they will get their money back.
The European Central Bank, European Union and the International Monetary Fund (IMF) are all lending more to Ireland but the average interest rate is 5.8% or almost six times the ECB's base rate.
Ireland should be able to borrow in the markets at less than the rate charged by the bailout fund until 2013, he said. "It depends on how things pan out. If there is a return to growth, general perceptions will change.
Ireland's Department of Finance said yesterday that Finance Minister Brian Lenihan will present legislation to the Dail within days which will shave 15 basis points off the cost of the €22.5bn (£18.8bn) which the State is set to borrow from the IMF. The legislation will save the taxpayer tens of millions of euro.