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BERLIN, Dec 8 (Reuters) - Ireland's central bank chief Patrick Honohan told a German newspaper he is confident a deal on his country's legacy bank debt is possible, and that Dublin requires more time to repay the debt in order to safeguard its wider aid package.
Ireland is lobbying the European Central Bank (ECB) to restructure 31 billion euros in promissory notes - a form of high-interest IOU - used to recapitalise the former Anglo Irish Bank, now called the Irish Bank Resolution Corporation.
Honohan said he hoped a deal would be done ahead of the next repayment, which is due in March.
"The planned repayment of the European Central Bank's aid comes at the wrong time. The government is trying to win back trust on the debt market, and current repayment plan is complicating this," Honohan told the Frankfurter Allgemeine Zeitung in an interview published on Saturday.
"Of course the money will be paid, but it should happen over a longer time frame. That would make much more sense given the wider aid programme for Ireland. We need more time," he added.
Ireland's leaders and people have been widely praised by European policymakers for acting decisively to cut national spending when the country's crisis began.
A deal on the promissory notes would help secure successful budget consolidation. The main thing was to negotiate a sustainable plan, which would "lengthen the repayment deadline considerably," Honohan said, without suggesting a time frame.
Asked why the ECB was cautious, Honohan said: "Whatever is done, it must be ensured that it cannot be seen in any way as state financing. Legally it must be absolutely water-tight. It is complex, but in my opinion this is possible," he said.