Is Germany Trying To Stick Ireland With An Extra-Punitive 7% Interest Rate On Loan?

Wolfgang Schaeuble


Update 12:53: According to a report, a deal has been reached now. Not 100% clear that includes the interest rate, though it sounds like it does. Full details when they’re announced.

Update 12:48: According to the BBC’s, there’s still significant disagreement (via between the UK and Germany on the matter of the interest rate. If they can’t get this ironed out tonight, it’s hard to imagine the announcement going over very well at all.

Original post: Does this explain the delay in the Irish bailout announcement?

BBC’s Robert Peston:

European finance ministers are struggling to reach agreement on the interest rate to be paid by Ireland for the €85bn of rescue finance it is set to receive from the EU and IMF – although they appear to have reached a settled position there should not be losses imposed on providers of senior debt to Irish banks.

As I understand it, the German finance minister, Wolfgang Schauble, is arguing that Ireland should pay a higher interest rate of around 7 per cent. His demand is thought to reflect the chronic unpopularity in Germany of the country’s participation in bailouts of financially weaker EU states, such as Greece and Ireland.

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