Taoiseach Enda Kenny has said Irish banks must secure more stable, longer-term funding.
He said there was a need to "build bridges" with European counterparts, and noted that the European Central Bank was vital when it come to the issue of funding.
"Emergency funding is obviously critical, but medium-term to longer-term funding would be much more stable and obviously would give a greater degree of credibitility to the markets and that's a case of dealing with the European Central Bank. The ECB now accepts it would not be prudent to have immediate fire sales of assets which would lead to further recapitalisation at high interest rates," he said.
Speaking this afternoon following a summit of European Union leaders, Mr Kenny said the the Government will wait for the results of stress tests on Irish banks before a decision is taken regarding whether to impose losses on bondholders.
The issue of the interest rates on the bailout package from the EU-IMF for Ireland would be dealt with after stress test results are published on March 31st.
"This package was put together to sort out a problem. What we've been saying for quite some time is that the package needs to be adjusted - adjusted in respect of the interest rate, and adjusted in respect of the cost of the banking structure that's associated with it. That's where the focus of the discussion will be when the outcome of the stress tests on the banks is known," he said.
"One of the important elements for Ireland here is to continue dialogue with other countries. As the outcome of the bank stress tests become known, we'll intensify that.
"I think that's important in the sense of explaining what out strategy is, the extent of problems that the people now face and what it is that we propose to do in keeping to the fiscal targets that we set, in keeping to the objectives as laid out in the programme for government and how we intend to achieve that. I think it's a case really of restoring confidence in other countries that we're serious about our business, and we are," he told RTÉ radio today.
France's finance minister yesterday renewed pressure on Ireland to give up its low corporate tax rate after euro zone countries came to its rescue last year with an €85 billion bailout.
Christine Lagarde said euro zone members "closed ranks" to help Ireland and should not be undercut by its corporate tax rate.
"Clearly there shouldn't be tax competition between member states and there shouldn't be a zone for arbitrage, and one that is not an appropriate level playing field," Ms Lagarde said. "It's a discussion that we will continue to have with our Irish friends."
Ms Lagarde conceded that Ireland's tax rates were a "tricky" subject and said the issue was not just Ireland's corporate tax rate but also its tax base.
"I hope we will see good common interest in really arriving at a more level situation," she said.
France and Germany say Ireland must alter its corporate tax regime before they cut the interest rate on the €40 billion EU segment of Ireland's EU-IMF rescue package.
Irish authorities need "a bit of time to figure out what is appropriate," Ms Lagarde said.
Additional reporting: Reuters
