Dublin, 12/04/2013 (Agence Europe) - At its meeting on Friday 12 April, the Eurogroup unconditionally approved a seven-year extension of the repayment deadlines for bailout loans to Ireland and Portugal.
Euro Commissioner Olli Rehn said the decision was “an important stage” in the two countries' return to financial autonomy and will help reduce their financing needs in the first years following the end of the aid package.
The decision extends the repayment date for cash for Ireland and Portugal from the European Financial Stability Fund (EFSF), an intergovernmental fund, but the Ecofin Council must also endorse it if it is to apply to cash from the European Financial Stability Fund (EFSF), an EU mechanism. The Ecofin Council was meeting the same day.
The Eurogroup highlights the importance for Ireland and Portugal of continuing to meet their budget and economic reform commitments. This demand is little more than a formality for Ireland because, as the head of the Eurogroup explained, it is the living example of a successful programme, providing the political will remains sustained and resolute. It is not so clear-cut for Portugal, which is in deep recession and some of whose draft measures in the 2013 budget, to the tune of €1.3 billion, have been deemed illegal by the Portuguese constitutional court. Dijsselbloem said this was a setback for the Portuguese government, but over the next few weeks, the country and its lenders will agree on further savings to fill the hole in the budget. (MB/transl.fl)