No Early Decision to Cut Rate on Irish Rescue Loans
That’s any decision on a reduction of lending rates Irish rescue would not be made until EU leaders agree on reform of their rescue scheme. In a separate development yesterday, the EFSF said it was Citibank, Societe Generale and HSBC appointed its inaugural bond sale next week to manage the Irish rescue. The fund expects there is a five year loan valued between € 3 billion and € 5 billion in a sale that will come about three weeks after the first bond sale EFSM.
Addressed first in the possible reform of the EFSF is an extension of its effective lending rate up to € 440 billion from € 250 billion. Also at issue is the possibility of giving powers to the fund for purchasing government. The question of reducing lending rates in Ireland reflect concern in some circles that the aid is too expensive and could hamper Irish recovery.
Official sources caution that Germany and the Netherlands continue to cling to the notion that all loans must be priced at rates deterrent to a rapid return to the private market to encourage. There is concern, these sources said that a substantial reduction in interest rates, the fund would refocus away from providing only “last resort” loans to needy countries.