Fianna Fáil Finance Spokesperson Michael McGrath TD has said that a reported euro zone agreement allowing for the early repayment of IMF loans by Ireland can make a positive difference to Budget 2015 due to be presented next month.

Deputy McGrath stated, “I very much welcome reports today that euro zone Finance Ministers have given the green light to Ireland repaying its IMF loans early, allowing us to make a substantial saving on our annual interest bill. The initiative to pay down expensive IMF debt out of current savings or cheaper debt is a sensible move for Ireland and, in truth, also strengthens the position of our European lenders.

“With Ireland due to pay in excess of €1 billion to the IMF in interest in 2015, this initiative has the potential to make a real difference to Budget 2015. Once the formalities have been completed, I am sure the NTMA will move immediately to start realising these savings. The saving on the interest due to the IMF can replace expenditure cuts or tax increases that may otherwise have had to take place. The capacity of the government to deliver meaningful income tax reductions has undoubtedly been given a boost.

“Having built up expectations about Budget 2015 among the public, the government is now seeking to play down what concessions may be possible. Fianna Fáil supports the achievement of a budget deficit of less than 3% in 2015. If the scope is there to do so, I believe that hard pressed working families need to be given a break in this budget.

“Securing agreement on the early repayment of IMF loans is to be welcomed. However, it should not be presented by government as a substitute for a deal on legacy bank debt. The government will be free to submit an application in November to the ESM for retroactive bank recapitalisation and it should now be making the preparations to do so.”