Speaking in the Dáil, on 29 June, during leader’s questions Sinn Féin Finance spokesperson Pearse Doherty challenged the Taoiseach to acknowledge that “since taking office the interest rate being paid on the European Financial Stabilisation Mechanism (EFSM) portion of the EU/IMF bailout loans has risen by 1%”
In response to a Parliamentary Question by Deputy Doherty the Department of Finance has confirmed that the interest rate on the EFSM portion of the EU/IMF programme loans was 5.425% in January 2011 and 6.425% in June 2011.
Deputy Doherty said:
“Week after week the Taoiseach and Minister for Finance tell the Dáil that negotiations seeking a reduction in the interest rate on the EU portion of the EU/IMF bailout loans are ongoing.
“On taking office the Government told us that they would secure a 1% reduction in the interest rate saving the taxpayer up to €450 million a year.
“Having failed to secure this marginal reduction Minister Noonan came into this house only a few weeks ago and admitted that he was no longer looking for a 1% reduction, but a 0.6% reduction and only on future draw downs, slashing the hoped for saving by 65%.
“However it now appears that not only will the government not secure this reduction, but the tax payer will end up paying even more as the interest rats on the EFSM portion of the EU/IMF loans has increased by 1% since the Government came into office.
“In a reply to a Parliamentary Question on interest rate payments the Department of Finance has confirmed that the interest rate on the EFSM portion of the EU/IMF programme loans was 5.425% in January 2011 and 6.425% in June 2011.
“It is time for the Government to admit that its strategy on the EU interest rates is failing. We need to change the terms of debate. It is not acceptable for the European Union to be benefitting financially from a loan extended to a partner state in economic difficulty.
“On the basis of the current interest rate our so called partners in Europe look set to profit to the tune of €10 billion as a result of the 3% mark up on the interest rate. The Minister for Finance needs to stop politely begging for a 0.6% reduction, acknowledge that the Irish people the cost of the recent interest rate rises and start to deal with the real issue, which is why our partners in Europe are profiting from a misfortune which they played a part in creating.”