The finance ministers of the EU have approved a grant that allows Ireland and Portugal to receive a seven-year extension to repay emergency bailout loans, reports ABC news. The extension was given to better facilitate economic stabilization and faster turnaround for both countries.
The 27 finance ministers of the EU met in the Irish capital for the first time since discussing the Cyprus bailout last month. The ministers congregated with intentions to help the crisis countries to continue long-term bond sales after bailout loans are completed. Ireland’s emergency loans were set to run dry later in 2013 while Portugal’s would be up in 2014.
In addition to discussing loan extensions, Irish finance minister, Michael Noonan expected conversation on how they would move forward with plans for central authority of Europe’s banks, which was a plan originally developed by national representatives of the EU.
Noonan stated, “I think the big breakthrough today will be that we have now got a political agreement on the single supervisory mechanism,” reports MoneyNews.
Their plan is to give the European Central Bank oversight and central authority over all banks in Europe. This plan will include a unified bank resolution mechanism for all members as well as a joint bailout fund.
Olli Rehn, a EU economic official, said, “The timeline for establishing a banking union should be as short as possible,” reports ABC News.
The ministers were unable to make significant progress towards detailing the future plans at the meeting in Ireland, however they remain adamant in their goal of reaching an agreement by June 2013. Despite slow advancement for common EU bank resolution, the approval of Portuguese and Irish loan extensions was a crucial step in the right direction for overall relief.
Noonan stated, “It is a very positive development and marks another significant step on Ireland and Portugal’s journey to a full and sustainable return to the markets,” reports ABC News.
Read the full articles at ABC News here and MoneyNews here.
