Final IMF debt to be paid off this week
IRELAND’S remaining IMF bailout debt is expected to be repaid by the end of the week.
The Government announced in September that it was seeking the early repayment of €5.5bn of loans taken out as part of its 2010 international bailout, which will clear the final portion of the loan from the International Monetary Fund (IMF).
That included paying off €4.5bn to the IMF as well as covering the bilateral loans from both Sweden, (€0.6bn), and Denmark (€0.4bn).
The Danish government said yesterday that the Irish Government had repaid, ahead of schedule, a €400m loan provided as part of the bailout. The Ministry of Finance in Denmark said the loan did not fall due until the period between 2019 and 2021. Ireland reduced the cost of its debt through the early repayment of its more expensive IMF bailout loans in 2014 and 2015, replacing the debt with funds raised at cheaper market rates to save around €1.5bn.
The NTMA previously paid back €18bn of IMF loans ahead of time, but the EU insisted at the time that some of the IMF rescue loans be kept so that the rescue fund remained part of the Troika overseeing the Irish bailout. Agreement was to be sought from the European lenders for the early repayment.
The Department of Finance said that all of the IMF debt is now expected to be repaid by the end of the week. In a statement, the Danish Ministry of Finance said Ireland had been hit hard by the financial crisis. Finance Minister Kristian Jensen said he was glad his country was able to provide a helping hand.
Meanwhile, former Greek Finance Minister Yanis Varoufakis and German politician Fabio De Masi want the European Central Bank to open up about its 2015 decision to freeze funding for Greek banks. Mr Varoufakis and Mr De Masi have asked the General Court of the European Union in Luxembourg to force the ECB to disclose the legal opinion that underpinned its decision to stop increasing the funds available in the emergency liquidity assistance programme for Greek banks.
The ECB refused, saying it preceded the freeze of the cap on ELA by two months. It also didn’t discuss the Greek case or any other specific ECB decision.
“The opinion was meant for internal deliberations and disclosing the opinion would undermine the ECB’s legitimate interest in receiving frank, objective and comprehensive legal advice, especially because of the general nature of the legal advice and its validity for future deliberations,” an ECB spokesman said.
The move heralded one of the most traumatic episodes of the Greek debt crisis, forcing the government to close banks for three weeks and impose capital controls. (Additional reporting Bloomberg)