Rehn Backs Loan Extension for Ireland, Portugal

The EU's economic and monetary affairs commissioner Olli Rehn has told CNBC that he backs the idea of granting anextension to Ireland and Portugal on their bailout loans.

European economic commissioner Olli Rehn at the World Economic Forum.
Photo: Vincenzo Pinto | AFP | Getty Images
European economic commissioner Olli Rehn at the World Economic Forum.

"We are in principle favorable to this objective because it will facilitate a successful return to market financing for Ireland and Portugal, which is in the profound interest of both of these countries as well as of the whole European Union," Rehn told CNBC at the finance ministers' meeting in Brussels.

Irish finance minister Michael Noonan said on Monday that he had made a joint request with his Portuguese counterpart for an extension of the maturity of their bailout loans. Both countries want similar treatment to Greece, which was granted a two-year bailout extension in November.

Ireland's bailout program, approved by the troika (the European Union, the International Monetary Fund and the European Central Bank) in December 2010, provides up to 67 billion euros ($89 billion) in financial support till the end of 2013.

Ireland became only the second country after Greece to ask for such financial help after the financial crash of 2008. Portugal's bailout, which was agreed in March 2011,totals 78 billion euros ($110 billion).

Separately, Rehn was quoted by newswires as saying the European Central Bank's bond buying program, called the OMT,could be an option for Ireland as it seeks to exit its bailout later this year. The Irish economy is expected to grow 1 percent in 2013, according to Merrill Lynch forecasts.

"Today's Ecofin reconfirmed the growing confidence in both countries' prospects for a successful return to the markets, to market financing," Rehn told a news briefing after
the meeting.

"The Ecofin and Eurogroup will,together with the Commission, explore in the coming months how to further facilitate this successful return to market financing."