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Ireland unveils deal to trim bank bailout costs

Shawn Pogatchnik, Associated Press

DUBLIN (AP) -- Ireland has announced an agreement with the European Central Bank to drastically overhaul repayment of its colossal bank-bailout costs.

The country's costs will be reduced by €20 billion ($26 billion) over the coming decade, with repayments extended until 2053.

Prime Minister Enda Kenny won applause from lawmakers Thursday as he announced the breakthrough after more than a year of negotiations with ECB governors in Frankfurt. The move came hours after an all-night emergency session of parliament ended with votes to dissolve one of the government-owned "bad banks" in favor of the new debt-repayment arrangements.

"In effect, we have replaced a short-term, high-interest-rate overdraft that had to be paid down quickly through more expensive borrowings, with long-term, cheap, interest-only loans," Kenny said.