Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context

Question 42: To ask the Minister for Finance when he expects the interest rate reductions applying to funds available to Ireland under the European Financial Stability Fund and European Financial Stability Mechanism to take legal effect; and if he will make a statement on the matter. [32428/11]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context

The interest rate margin reduction for the European Financial Stability Fund (EFSF) was incorporated into a new legal agreement on 27th October. The interest rate margin is now defined as zero. It was agreed that countries borrowing from the EFSF would pay a guarantee commitment fee of 0.10% per annum on top of the cost of funds and the cost of operations of the EFSF. This will apply to all future borrowings from the EFSF. In relation to the existing borrowing from the EFSF, I expect that the margin, which was prepaid, will be refunded upon the maturity of the bond backing the loan to Ireland in July 2016. It cannot be repaid before that time as it an integral part of the terms and conditions of the bond. The details surrounding this have to be confirmed with the EFSF. In relation to the European Financial Stabilisation Mechanism (EFSM), the margin reduction was incorporated into an amendment to the existing legal agreement on October 28th and it is now defined as zero. This will apply to EFSM borrowings back to the date upon which they were issued.