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"The extension will smoothen the debt redemption profile of Ireland and Portugal and lower their refinancing needs in the post-programme period”, Klaus Regling, CEO of the EFSF said. “It will enhance the confidence of market participants and thus protect Ireland and Portugal from refinancing risks.”
The EFSF has committed €17.7 billion for Ireland out of a total programme volume of €85 billion. For Portugal the EFSF has committed €26 billion which represents one third of the €78 billion programme volume.
The EFSF members had already given political support to the improvement of the loan conditions at the informal Eurogroup meeting of 12 April 2013, where these measures were decided in the context of the Cyprus programme. The European Financial Stabilisation Mechanism (EFSM), which has committed €22.5 billion for Ireland and €26 billion for Portugal, was also given a green light by the EU finance ministers on 21 June 2013 to extend loan maturities by seven years.
Commenting on the agreement, the Irish Minister for Finance Michael Noonan stated: “I am very pleased that the amendment to the maturities on Ireland’s EFSF and EFSM loans has now been agreed. This successfully brings to a conclusion our negotiations and will reduce the market refinancing requirement by €20 billion over the period 2015 to 2022.
"This builds upon the successful promissory note negotiations which reduced the market refinancing requirement by €20 billion over the next 10 years. Taken together, the successful conclusion of both sets of negotiations has delivered a cash flow benefit of €40 billion over the next decade and will further strengthen our ability to make a full and sustainable return to the markets."