The Danish finance ministry said on Tuesday that Ireland has repaid its €400 million loan earlier than expected, as it praised Ireland for its “exemplary” approach to restoring its public finances.
The loan, which was offered to Ireland as part of an international recovery package at the time of the financial crisis, was due to be repaid between 2019-2021, but has now been repaid in full. The loan was part of a three-year €67.5 billion package for Ireland by the EU and IMF, delivered on November 28th 2010, which, in addition to loans from the IMF and European Financial Stabilisation Mechanism, also included bilateral loans from the United Kingdom (€ 3.8bn), Sweden (€ 0.6bn) and Denmark (€ 0.4bn). The Danish loan, offered in four tranches, was due to start maturing on September 30th, 2019, with the last tranche maturing in May 2021.A spokesman for the Danish finance ministry said that the early repayment of the loan would result in an expected loss of interest income of about €2.8million a year in both 2018 and 2019, and “slightly less” in 2020 and 2021.
Back in September, Minister for Finance Paschal Donohoe said that Ireland was set to repay its debt to both Sweden and Denmark early, while Ireland will also repay €4.5 billion in funds owed to the IMF early. The combined savings from servicing the three loans is expected to be around €150 million.
Kristian Jensen, Minister for Finance, said he was "glad" that Denmark could help Ireland at the time, and "even happier" that the country can now stand on its own two feet.
“It shows that taking national ownership and implementing reforms and budget improvements also has a clear impact on growth and the outside world’s confidence in the national economy,” he said.
Noting that Ireland was “exemplary” in how it responded to the crisis, in terms of reforms and consolidation of public finances, in a statement the finance ministry said the Danish loan is now “redundant” as Ireland can now access borrowing on international markets at favourable rates.
It added that Ireland is now positioned as one of Europe’s fastest growing economies.
