Luxembourg's Jean-Claude Juncker, who leads the group of euro-area finance ministers, said he sees “good reasons” for easing Ireland's debt burden after one of the costliest banking bailouts in history.
"There are good reasons for easing the burden, which has been put on Ireland, as far as the debt service," Mr Juncker said at an event in Brussels.
The State has injected about €62 billion into the banks, since bad debts soared following the collapse of the property bubble in 2008.
The Government is seeking European help to restructure and cut the long-term cost of about €30 billion of so-called promissory notes used to bail out Anglo Irish Bank and Irish Nationwide Building Society in 2010.
"The promissory note arrangements remains the primary focus," said Donal O'Mahony, a strategist at stockbrokers Davy, adding that Juncker's remarks "chime" with comments from the International Monetary Fund.
The IMF, along with the European Central Bank and European Commission, are overseeing the €67.5 billion bailout program that Ireland entered in 2010.
Ireland's October 2020 bonds, regarded as the benchmark, yielded 6.8 per cent today, down from 9.1 per cent at the start of December.
The Government is seeking to delay a €3.1 billion payment to the former Anglo Irish due on Saturday, March 31st, as it seeks a longer-term solution to the cost of bailing out the lender, nationalised in 2009.
During an Oireachtas committee hearing this afternoon, TDs and Senators will question Central Bank governor Patrick Honohan about progress on talks with European authorities on the payments.
Prof Honohan may also be questioned about the potential for moving some bad mortgage loans and so-called tracker loans out of state-controlled Allied Irish Banks and Irish Life and Permanent. Such a transfer would provide a "dual boost to bank profitability and deleveraging," Mr O'Mahony at Davy said.
Ireland is seeking a full return to international credit markets by the middle of next year. The National Treasury Management Agency, said it had agreed to explore investment opportunities in Ireland, with CIC International, a subsidiary of China's sovereign wealth fund.
Bloomberg
