THE EU Commission has raised a further €3.4 billion for Ireland’s bailout but at a rising interest rate, bringing the total raised so far this year by European bodies to some €13.4 billion.

The commission said its bailout fund – the European Financial Stability Mechanism (EFSM) – raised the money at an issuance spread fixed at mid-swap plus 8 basis points. This was “at the tight end of the initial price guidance”, it said.

This implies the EFSM will pay a rate of 3.257 per cent on the money, which it will lend on to Ireland on a back-to-back basis. The addition of a 2.925 surcharge means Ireland will pay an interest rate of some 6.182 per cent for the money.

In its previous Irish transaction, last January, the EFSM raised €5 billion at an issuance spread fixed at mid-swap plus 12 basis points. This meant it paid an annual interest rate of 2.59 per cent for the money, leaving Ireland with an interest charge of some 5.51 per cent for that part of the bailout.

The euro zone countries’ own fund – the European Financial Stability Facility – raised a further €5 billion for Ireland in February.

The latest deal comes as Taoiseach Enda Kenny battles Franco-German pressure to dilute Ireland’s corporate tax regime in return for a percentage point reduction on the surcharge that applies to Ireland’s bailout loans.

The commission favours a reduction, but such a move can only be made with the unanimous approval of euro zone countries.