Greece may have a chance to improve the terms of its borrowing agreement, after sources suggested that Ireland’s cost of borrowing from the European Financial Stability Fund (EFSF) could go down. The issue is under discussion in Brussels and may be included in the agenda of the eurozone finance ministers’ meeting on Monday. Athens has already secured pledges for an extension to its repayment period, but financial analysts such as David Mackie of JPMorgan Chase and Julian Callow of Barclays Capital believe that this country could also benefit from a drop in borrowing rates by EFSF, as is being discussed at the seat of the European Union. Economists and analysts are in favor of a decline in the interest rate by up to 50 percent for Ireland’s 85-billion-euro package. «Europe should bring down the cost of borrowing by half, that is by 250 basis points,» Mackie noted on Ireland, which was the first country to resort to the EFSF. Ireland’s debt will next year amount to 114 percent of its gross domestic product, while Greece’s will soar to 156 percent, the highest in the history of the eurozone. The Irish interest rate should therefore drop to 3.2 percent, «given that growth will not be any higher than 1 percent this year and 2 percent in 2012,» Mackie added. He did not mention how many basis points Greece’s rate should drop by, but that should not be any different. The analyst suggested that «what is needed is a combination of fiscal austerity to reduce primary deficits and a prolonged period of subsidized cost of borrowing which would ensure that the fiscal adjustment is used to improve the momentum of the debt and not to serve a higher debt» in the future. An extension to Greece’s loan repayment period «would send a positive signal to markets,» according to Marco Buti, the head of the European Commission’s Directorate General for Economic and Financial Affairs. Reducing the cost of borrowing forms part of a package of broader changes to the EFSF that are being examined, also including an increase to its funds, as the finance ministers of France and Belgium suggested yesterday, and the extension of its role through the capacity to repurchase debt.