* Experts from international lenders to come up with
* EU ministers likely to decide in April how to help
Ireland, Portugal return to market
By Jan Strupczewski
BRUSSELS, March 5 European Union finance
ministers asked international experts on Tuesday to suggest how
best to ease the return of Ireland and Portugal to debt markets
as they near the end of their programmes of emergency funding.
Ireland got a three-year European Union and International
Monetary Fund financing programme in late 2010 and Portugal got
the same in the second quarter of 2011 in exchange for a package
of fiscal austerity and structural reforms.
Both intend to return to normal market financing this year
and next, but face a refinancing peak in 2016 and then again in
2021 for Portugal and 2022 for Ireland. Both countries have
asked for the emergency loans to be extended in maturity by an
average of 15 years to help smooth out the repayment schedule.
The loans came from the temporary euro zone bailout fund,
the European Financial Stability Facility (EFSF), and from a
fund backed by the budgets of all 27 EU members - the European
Financial Stability Mechanism (EFSM).
"We discussed whether EU Finance Ministers would be ready in
principle to consider an adjustment of the maturities on the
EFSF and EFSM loans to Ireland and Portugal in order to smooth
the debt redemption profiles of both countries," the ministers
said in a statement.
"We agreed to ask the Troika to come forward with a proposal
for their best possible option for each of these two countries
for EFSF and EFSM loans," the statement said.
The Troika are experts from the European Central Bank, the
European Commission and the International Monetary Fund.
EU Economic and Monetary Affairs Commissioner Olli Rehn said
on Monday the ministers could make a decision on extending the
loans at the next Eurogroup and EU finance ministers meeting in
Dublin in April.
A full return to markets by Dublin and Lisbon would be a
success for the euro zone, which wants to show that bailout
reforms can work, even though the sovereign debt crisis sent
unemployment rocketing and led to an election standoff in Italy.
Irish Finance Minister Michael Noonan told reporters on
Monday he was aware his demand may not be met fully.
"Our lowest maturities are five years and they extend out to
the high 20s, so what we are asking is an extension of 15 years
on average, but we will see how it goes," Noonan said.
"I don't think there is a disposition to extend that long,"
A senior European Union source said Portugal was demanding
the same extension, taking its cue from what was granted to
Greece as part of its package in November.
An options paper by the European Commission and the EFSF
presented five options on how to help Portugal and Ireland.
Back loading repayment of the loans within their existing
schedules - or possibly also extending the maturities of the
loans beyond the current repayment schedules - are the preferred
options, according to the paper seen by Reuters.
Dublin and Lisbon could also at some point apply for a
credit line from the permanent bailout fund, the European
Stability Mechanism (ESM), which would also pave the way for the
ECB to start buying their bonds on the secondary market.
Ireland has begun to gradually return to capital markets and
plans to launch a new 10-year benchmark bond before resuming
regular bond auctions later this year.
The country raised a quarter of its long-term debt target
for the year in January when it sold more than 2.5 billion euros
of five-year debt.
Portugal dipped back in the market in January with a 5-year
bond for the first time since its 2011 bailout. It is expected
to try a 10-year bond later in the year.