Reuters: Senior Merkel ally warns against Portugal, Ireland loan extension

07 March 2013

A senior lawmaker from Angela Merkel's conservatives warned against granting Ireland or Portugal any significant extension to their bailout loans, saying German lawmakers would not approve such a measure.

Norbert Barthle, budget spokesman for Merkel's Christian Democrats (CDU), said it was crucial to the eurozone's policies that bailout agreements were honoured and upheld. "A significant extension to the average loan maturity would be exactly the wrong signal, in particular as Ireland has just seen a significant reduction of its burden through debt restructuring. I cannot imagine that the Bundestag would approve this", Barthle said in a statement.

Small adjustments such as backloading repayments within the current schedule could be useful to helping countries back to the financial markets, he added. Lisbon and Dublin both intend to return to normal market financing this year and next, but face a refinancing peak in 2016 and then again in 2021 for Portugal and 2022 for Ireland.

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