Mr Gilmore’s appeal for money from the €440 billion European Financial Stability Facility to help lower the interest burden on its bank bail-out programme is an indication of the competing claims that the soon-to-be enhanced rescue fund is likely to face.
“The banking problems of one country are connected to the banking health of another country”, Mr Gilmore said. “There is an interconnectedness there. In terms of the Irish situation, I think the gain for Europe is that Ireland is now the best prospect of a recovery story.”
Irish officials are now lobbying Brussels and EU states for help to reduce the cost of the banking bail-out without hitting senior bondholders. One proposal is for the government to borrow money from the EFSF at low interest rates to pay off €31 billion in promissory notes it issued for the recapitalisation of Anglo Irish Bank and Irish Nationwide Building Society. The proposal could potentially save billions of euro on the interest bill, estimated to cost Ireland up to €17 billion over 20 years, and help the country’s recovery. “We are doing what we have to do and we are succeeding. Obviously, we look to partners to co-operate with us”, said Mr Gilmore.
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