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Minister boosts bailout rate hopes

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Communications Minister Pat Rabbitte is hopeful that cheaper interest rates for the bailout will be agreed

Communications Minister Pat Rabbitte is hopeful that cheaper interest rates for the bailout will be agreed

Communications Minister Pat Rabbitte is hopeful that cheaper interest rates for the bailout will be agreed

A government minister has said he is hopeful cheaper interest rates for the state's 85 billion euro bailout will be agreed within 10 days.

Communications Minister Pat Rabbitte reiterated warnings that Ireland was being charged too much to save banks, repay their debts and avoid national bankruptcy.

He made the claims as Irish Central Bank governor Patrick Honohan faced down accusations from one of the country's most respected economists that he got his sums wrong on the cost of rescuing the banks.

Mr Rabbitte said a cheaper loan deal may be agreed by May 16-17 when European Union finance ministers meet again.

"The Government is absolutely satisfied that the existing rates are punitive and must be reduced," the minister said.

"The whole point of this kind of agreement is so the country affected can get access to the normal debt markets again within the timeframe prescribed. Quite frankly the rate on Ireland must be reduced and in my own view the debt must be rescheduled."

The minister also disputed the damning assessment of the debt crisis by University College Dublin economist Morgan Kelly - the first expert to predict Ireland's economic crash - who has slated Mr Honohan's calculations of bank losses.

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The final bill, announced just over a month ago, is 70 billion euro.

Mr Kelly argued in The Irish Times that Ireland is heading for bankruptcy unless it pulls out of the IMF-EU deal.

Mr Rabbitte went on to describe Mr Kelly's forecast of national bankruptcy under the weight of IMF-EU bailout loans as a "powerful horror polemic" which failed to give a viable solution to the debt crisis.


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