Ireland expects European leaders to agree to cut the country's bank debt burden by June of next year, when Dublin's presidency of the European Union draws to a close, Prime Minister Enda Kenny was quoted as saying on Sunday.
European leaders vowed in June of this year to allow the region's bailout fund to directly invest in troubled banks but Germany is opposed to using the fund to retroactively recapitalise Irish banks.
Kenny, who takes over the six-month rotating presidency of the European Union in January, said he was confident his European partners would agree the outline of a deal during that term.
"By June, following the decision of the European Council, we expect agreement on the modalities of reducing the burden that the Irish taxpayer took on from the recapitalisation of the going-concern banks," Kenny was quoted as saying by The Sunday Business Post and The Sunday Times newspapers.
Europe's bailout fund, the European Stability Mechanism, will be able to directly recapitalise lenders in 2014.
"While an actual transaction may not be possible until 2014, a clear signal on how this is going to be done would certainly strengthen market confidence and reduce interest rates for Ireland as we seek to exit the programme," Kenny said. German Chancellor Angela Merkel has so far given Dublin no clear signal on easing its bank debt burden but she has said she sees Ireland as a "special case".
Ireland spent 64 billion euros, equivalent to 40 percent of its annual economic output, to save its banks from collapse, forcing the country to seek an EU-IMF bailout programme.
Ireland has a 15 percent stake in Bank of Ireland and has near 100 percent ownership of Allied Irish Banks and permanent tsb (PTSB).
In an interview with Reuters on Wednesday, Kenny said a deal on easing Ireland's bank debt was crucial for it to successfully exit its bailout programme next year.
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