The IMF’s confirmation that Ireland may repay its loans to the Fund early without any penalty whatsoever opens up the possibility of a very significant annual saving for the State and every effort must be made by the government now to achieve this, according to Fianna Fáil Spokesperson on Finance Michael McGrath.
The IMF Mission Chief for Ireland, Craig Beaumont, in a written response to Deputy McGrath, confirmed that Ireland can decide to repay its outstanding IMF loans early and that no fee or conditionality will apply.
Deputy McGrath stated, “Under the bailout programme, Ireland has borrowed €22.5 billion from the IMF at a blended average interest rate of 4.99% – about twice the cost of borrowing on the markets at the moment. Given the benign borrowing conditions at present, the €20 billion cash stockpile held by the NTMA and the fact that we are paying almost 5% on the IMF loans, it makes perfect sense for the government to pursue the possibility of repaying the loans early.
“The government now needs to follow up on this with the other international lenders who provided us with funds under the bailout programme as their consent is required to avoid early repayment of the IMF loans triggering proportionate repayments to the other lenders. It is in everyone’s interests that Ireland’s debt position is made more sustainable and that this annual saving is achieved for the benefit of Irish taxpayers.
“The Minister for Finance has himself said that repaying €15 billion early to the IMF could save up to €375 million annually. Realising this saving would make our budgetary situation easier over the years ahead and every effort must now be made to make it a reality. There is now a golden opportunity to reduce Ireland’s annual interest bill. I will be putting pressure on Minister Noonan to deliver on this on the resumption of the Dáil in September.”