I am informed by the NTMA that a reduction of 50 basis points in the interest rates charged by the EFSF, EFSM, UK, Sweden and Denmark would result in savings on debt service costs of €5 million per annum for every one billion euro outstanding during any particular year. However, it should be noted that the Government has already negotiated the removal of the interest rate margins on the EFSF, EFSM and UK loans to Ireland which, taken together, account for nearly all of the EU programme debt. Therefore, any cut to the interest rate from these lenders would result in an interest rate below their respective cost of funds and in effect represent a subsidy to Ireland.
The NTMA also inform me that an extension of maturities to 50 years on all EFSF, EFSM and bilateral loans from the UK, Sweden and Denmark may result in debt service savings to the extent that the interest rate on these loans would be below the replacement interest rate costs when they eventually mature over the coming years and decades. However, it is not possible to give a meaningful estimate of the replacement interest rate costs due to the protracted period of time involved and it should be noted that in general terms the EFSF and EFSM are currently in a position to borrow money at lower interest rates than Ireland can independently borrow at for similar maturities.