Bond payment delayed to 2025?

THE proposed deferral of the controversial €3.1 billion Promissory Note payment due on March 31 has been welcomed by Clare Deputy, Michael McNamara.
Finance Minister Michael Noonan announced in the Dáil on Wednesday night that the Government is negotiating a new deal on the Promissory Note, which was due following the payment of €40bn into the now defunct Anglo Irish Bank, until 2025.
Minister Noonan stated the final details of the plan still have to be worked out and put to the ECB for its approval on Thursday.
If the new deal is approved, the Government will issue a new bond to the ECB, which can be redeemed in cash and will not have to be repaid until 2025.
The first payment, which was roundly criticised by economists and public representatives, was made last year and another €3.1bn was scheduled to be paid at the end of the month.
Fears were expressed that the Government would be forced to pay this huge sum of money, despite intensive negotiations in Europe following comments from European Commissioner for Monetary Affairs Olli Rehn about Ireland’s promissory note commitments.
Economic commentators had predicted the Government would have to pay the €3.1bn bank debt due within days after the European Commission had previously ruled out delaying the payment in anticipation of a deal to ease Ireland’s banking debt.
Speaking in Brussels recently, when asked about flexibility on Ireland’s repayment, Mr Rehn said, “Each and every member state respects the commitment it has undertaken and this is valid in the case of Ireland as well”.
Deputy McNamara said this deal, if approved, would be a very significant first step towards an overall deal to cope with Ireland’s very large overall debts.
“The Government is stabilising the economy and the financial outlook is much brighter this year compared with this time last year,” he said.