The Government wants to write-down or defer principle payments on promissory notes of €30.6 billion issued by the State to Irish Bank Resolution Corporation (IBRC), formerly Anglo Irish Bank.
Minister for Transport Leo Varadkar said today while a reduction in the interest rates attached to the loans was also being sought: “The big show is the principal, it is the €30 billion, and what we want there is either to have it written down or postponed for a very, very long time".
The Government is covering €30.6 billion of the €34.7 billion cost of the lenders now housed in IBRC through promissory notes.
The State is paying IBRC €3.1 billion a year through the notes until 2023 and will then pay a declining sum of money every year until 2031.
The structure of the notes means the State must also pay interest to Anglo that amounts to a further €17 billion over the life of the annual payments until 2031.
IBRC also uses the notes as collateral to borrow emergency loans from the Central Bank through its exceptional liquidity assistance (ELA) facility to fund the bank.
Minister for Finance Michael Noonan has pressed the Government’s case to ease the burden of the bank rescue at separate meetings with European Central Bank chief Mario Draghi and EU economics commissioner Olli Rehn.
Mr Varadkar also said the Government is going to ask Aer Lingus to pay a dividend this year because the company was profitable and had significant cash reserves.
"Aer Lingus has a profit and a lot of cash and we'd like a dividend". He said there was "a lot of interest" among potential buyers for the State's stake in the carrier.
"We are not going to sell the country short" in a sale, Mr Varadkar said. "At the right time and at the right price, the price at the moment is not great."