The EC proposes to reduce to 3.5% the EFSF's rate for Ireland and Portugal

The EC proposes to reduce to 3.5% the rate applied by the EFSF to Ireland and Portugal, now at 6.5% and 5.5% respectively, and Madrid’s financial City welcomes the idea.

For Banco Santander,

“The European Commission yesterday proposed reducing to 3.5% the interest rate charged by the EFSF to Ireland (currently over 6.5%) and Portugal (5.5%), and extend the debt maturities to 30 years. This proposal is the result of an agreement reached by European leaders in July to ease the conditions applied to both countries, and it is expected that the measures will be applied in a matter of weeks.”

Likewise, Link analysts also say that the measure will have a retroactive effect, so that the margin paid above the new threshold will be returned to Dublin and Lisbon. The reduction aims to

“promote liquidity and contribute to the sustainability of both countries in support of their strong economic and reform programmes.”