Dublin plans to issue a long-term government bond to cover a €3.1 billion cash payment due on its banking debt on March 31, and is seeking agreement from European authorities to rubber stamp the deal.
Michael Noonan, Ireland’s minister for finance, told the Irish parliament late on Wednesday he was negotiating with the European Central Bank to gain approval for the financial manoeuvre, which would ease the country’s short-term cash flow situation.
Dublin is due to make the €3.1 billion payment at the end of the month to the former Anglo Irish Bank, which is then supposed to use the funds to reduce its emergency borrowings from the central bank. Under a deal struck with the EU authorities, Dublin must pay €31 billion over 20 years to cover the cost of the promissory notes issued to Anglo.
Dublin has been lobbying to postpone the next €3.1 billion instalment on March 31, which it fears could provoke public anger ahead of a referendum on the EU’s new fiscal treaty due in early summer. It is also seeking a wider restructuring of the promissory notes, which would ease the short-term burden on its exchequer.
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