* EU officials anxious for success story in euro zone crisis
* Experts from international lenders to make proposals
* EU ministers likely to decide in April on how to help
* Any loan extension may still need parliamentary approvals
By Jan Strupczewski and Annika Breidthardt
BRUSSELS, March 5 European Union finance
ministers sought advice on Tuesday on how to help Ireland and
Portugal demonstrate the success of their painful bailout
programmes by returning to international markets to raise funds.
Ireland took a three-year European Union and International
Monetary Fund financing programme in late 2010 and Portugal
followed in the second quarter of 2011 in exchange for budget
cuts, tax rises and other economic changes.
Both intend to return to normal market financing this year
and next, but face a refinancing peak in 2016 and then again in
2021 for Portugal and 2022 for Ireland.
Both have asked for the emergency loans to be extended in
maturity by an average of 15 years, to make it easier for them
to convince financial markets they can manage their official
repayments as well as servicing debt they raise from investors.
A full return to ordinary market funding would give the euro
zone a chance to claim that bailout reforms can work.
Given rocketing unemployment in Spain, Portugal and Italy,
and an Italian election this month that has trapped the bloc's
biggest sovereign debtor in political stalemate, euro zone
leaders are leaning towards helping.
"We discussed whether EU Finance Ministers would be ready in
principle to consider an adjustment of the maturities on the
EFSF and EFSM (bailout) loans to Ireland and Portugal in order
to smooth the debt redemption profiles of both countries," the
ministers said in a statement.
They also agreed to ask the 'troika' of experts from the
European Central Bank, the European Commission and the
International Monetary Fund "to come forward with a proposal for
their best possible option for each of these two countries for
EFSF and EFSM loans."
They were referring to the temporary euro zone bailout fund,
the European Financial Stability Facility (EFSF), and a fund
backed by the budgets of all 27 EU members - the European
Financial Stability Mechanism (EFSM).
EU Economic and Monetary Affairs Commissioner Olli Rehn said
on Monday the ministers could make a decision on extending the
loans at the next Eurogroup and EU finance ministers' meeting in
Dublin in April.
Irish Finance Minister Michael Noonan told reporters on
Monday he was aware his demand may not be met fully.
"Our lowest maturities are five years and they extend out to
the high 20s, so what we are asking is an extension of 15 years
on average, but we will see how it goes," Noonan said.
"I don't think there is a disposition to extend that long,"
he said. A senior European Union source said Portugal was
demanding the same extension, taking its cue from what was
granted to Greece as part of its package in November.
But granting an extension, depending on whether it is seen
as a major or only a small change to the programmes, may require
approval by parliaments, or their committees, in Germany, the
Netherlands, Finland, Estonia and Slovakia.
"If it is a non-substantial change to the programme, then we
must inform the budget committee and give it the opportunity to
make a statement. If it is substantial, then we need a prior
agreement of the Bundestag," German Finnace Minister Wolfgang
"... It could well be that it is enough, and that is our
position, that you (help) with the peaks with a delay of
individual instalments. It could also be that you would have to
change the average maturity, that would likely be a substantial
change. And as that is not even up for agreement yet, we're not
going to make up our minds yet," he told reporters.
An options paper by the European Commission and the EFSF
presented five options on how to help Portugal and Ireland.
Back-loading repayment of the loans within their existing
schedules - or possibly also extending the maturities of the
loans beyond the current repayment schedules - are the preferred
options, according to the paper seen by Reuters.
Dublin and Lisbon could also at some point apply for a
credit line from the permanent bailout fund, the European
Stability Mechanism (ESM), which would also pave the way for the
ECB to start buying their bonds on the secondary market.
Ireland has begun to gradually return to capital markets and
plans to launch a new 10-year benchmark bond before resuming
regular bond auctions later this year.
The country raised a quarter of its long-term debt target
for the year in January when it sold more than 2.5 billion euros
of five-year debt.
Portugal dipped back in the market in January with a 5-year
bond for the first time since its 2011 bailout. It is expected
to try a 10-year bond later in the year.