Minister For Finance In Paris For Bailout Talks

Minister for Finance Michael Noonan has said it could be in Ireland's interests to push the deadline for a deal on banking debt relief beyond October.

Following a meeting with his French counterpart Pierre Moscovici in Paris this morning, Mr Noonan said the government would like to have an agreement in place before the December budget, but that this was not essential.

Euro zone finance ministers had endorsed a late October deadline for a plan to ease the weight of Ireland's multi-billion-euro debt, but there are growing signs that the timeframe will be revised as discussions continue between Dublin and the troika of the European Commission, the IMF and the European Central Bank.

"We understand that it might be in the Irish interest if the timeline were extended somewhat," Mr Noonan said. "It would be ironic if we agreed to something before the end of October and a more advantageous arrangement was available later, after arrangements with Spain have been concluded."

It is understood that EU plans to tackle the banking debt are focused on Spain, with a “read-across” later to Ireland, according to Central Bank governor Patrick Honohan.

Speaking on whether or not it was important to have the deal in place ahead of the December budget, Mr Noonan said: "Obviously there are issues that would come across the organisation of the budget. It's something that we would like, but it's not vital.

"It doesn't really change the budget arithmetic, because our intention would be that, if we get the kind of arrangement we're seeking, that we will use the gain to reduce the debt and make it more sustainable. The second part of it then would be the servicing costs of the reduced debt, there would be savings obviously on the current side, and we would like to apply those to the programme as well."

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