2013-04-16 10:05:26 +02:00

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8203925
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# Ireland loan won't add to UK deficit, says Osborne
## George Osborne, the Chancellor, said Britain's bilateral emergency loan to
Ireland will not add to Britain's deficit, and will earn £440m for the public
coffers.
![Ireland loan won't add to UK deficit, says Osborne][1]
A protester outside the Irish Prime Minister's office in Dublin last month.
Photo: AFP
4:46PM GMT 15 Dec 2010
[Comments][2]
Britain has offered Ireland a loan of £3.25bn as part of its** [£7bn
contribution][3]** to an international bailout for the struggling eurozone
country.
"If Ireland takes out all the loan that is being made available to them, pays
it back with the interest that has been forecast, then they would pay us £440m
in terms of fees and interest," Mr Osborne said.
The Irish parliament approved the €85bn (£72.5bn) bailout package from the
European Union and the International Monetary Fund (IMF) this afternoon.
With the support of independent MPs, the Irish government overcame opposition
parties who wanted to renegotiate the deal to force some of Ireland's banking
losses onto the banks' debtholders.
Mr Osborne said that the final detail of the loan had only been agreed early
today.
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"People ask, of course, why are we extending the loan to Ireland? We are doing
this because it is overwhelmingly in our national interest that we have a
strong Irish economy and a stable banking system," said the Chancellor.
"It is not just about the Irish economy and Irish jobs, it is about the
British economy and British jobs."
Ireland is the fifth largest market for British exports.
The European Union rejected suggestions that the interest rate on the loan to
Ireland is too high, saying the emergency loan is on preferential terms.
The terms of the loan are similar to those offered by the IMF, the EU said,
but acknowledged that the margin is designed to encourage Ireland to return to
financial markets as soon as possible.
The EU is the biggest contributor to the €85bn Irish bailout package, agreed
last month.
Irish media have said the 5.7pc interest rate that the seven and a half-year
loan carries is too high, compared with the rate of around 3pc charged by the
IMF.
The European Commission said the IMF's rate was a floating one while the EU's
is fixed, so the two cannot be compared directly.
Ireland will receive its first EU money in January after the the eurozone's
emergency aid vehicle, the European Financial Stability Facility, issues its
first bonds.
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