Enda Kenny (Mayo, Fine Gael)

The updated NTMA estimates, which reflect last week's announcements and decisions by the Minister for Finance, refer to a reduction of approximately 2.6% in the EFSF rate and a reduction of just under 3% - 2.925%, in fact - in the EFSM rate. Therefore, the annual interest saving under the EFSF will be €450 million and the savings under the EFSM will be €650 million. There will also be a saving of approximately €100 million in respect of the bilateral loans. If the entire €45 billion is drawn down, approximately €1.2 billion will be saved each year, for as long as the amount remains outstanding, as a result of these changes. In addition, the cost of the IMF loans will reduce as a result of recent and forthcoming increases in Ireland's IMF quota. The NTMA has calculated that the overall benefit of this interest rate reduction will be some €1.9 billion, of which some €30 million will arise in 2012 and is included in the overall estimate of €900 milllion in interest savings next year which even Deputy Joe Higgins will admit are very substantial. Based on the estimates for the changes to the EU and IMF elements of the loans, the overall savings, based on the inital lifespan of the programme, which will be extended, would be over €10 billion. For 2012, the changes to the EU and bilateral loans, combined with the impact of the IMF quota changes, amount to some €900 million. The average maturity date of the loans will be extended. This will have the effect, as pointed out by Commissioner Rehn on Friday, of improving our debt sustainability and also the liquidity for Ireland.

The Minister for Finance, Deputy Noonan, has pointed out that Ireland will have a pre-paid margin of €600 million in the EFSF returned in 2016. While it is important to note that this return will be been factored into the interest savings figures once the funding under the programme is drawn down, it gives rise to an upfront capital receipt of €600 million capital in 2016 directly to the Exchequer.

See this speech in context