Michael Noonan speaks to Cypriot Finance Minister Kikis Kazamias as he arrives for the Ecofin meeting last night

By Tony Connelly, Europe Editor, in Brussels

Minister for Finance Michael Noonan will meet Mario Draghi, the ECB president, in Frankfurt later today.

Although the two men will have met on the margins of EU finance ministers’ meetings, this will be their first formal meeting since the Italian took over from Jean-Claude Trichet in November.

The government is still seeking to lower the €63bn portion of the country’s debt burden which relates to the bailout of Irish banks.  Dublin’s argument is that when the bank rescues took place instruments such as the European Financial Stability Facility (EFSF), with its low interest rate, were not available to the state.

While officials are extremely cautious on what can be achieved, broadly speaking the government is looking for adjustments which would lower interest rates and extend maturities.

Any adjustments could relate to the €30 billion worth of Anglo promissory notes which from 2013 will have to be repaid at punitive interest rates.  These were i.o.u.s which the government passed on to Anglo Irish Bank so it could borrow the equivalent from the ECB.

Officials have refused to put a figure on how much money the adjustments could earn the exchequer or when the benefits might materialise, but they point to the agreement by the Troika of international lenders to Ireland – the ECB, the European Commission and the IMF – to work on a joint document on the issue with the government as a positive signal.

Meanwhile it’s back to the drawing board for the negotiations on Greece’s debt level.

Eurozone finance ministers meeting in Brussels last night insisted that Greece implement further economic reforms before the country’s second, €130bn euro bailout can go ahead.

Ministers also said that international creditors, who are facing a write down of some €100bn in Greek debt, must accept a lower interest yield on new bonds they will receive as a substitute for existing bonds.

If Greece and its creditors cannot agree a voluntary debt restructuring its widely thought the country could default as early as March.

The question of what kind of losses international creditors must accept to reduce Greece’s debt burden has hung over the country’s second bail out since last July.

Creditors are being asked to swap their existing bonds for new ones which are worth at least only half the nominal value of the old ones, and which will have much longer maturities.

The Institute of International Finance (IIF), which is negotiating on behalf of creditors, says an interest rate of 4pc on the new bonds is the very last offer they will make, but eurozone ministers said the rate must be lower, well below three and a half percent, according to the chair of the eurogroup of finace ministers Jean-Claude Juncker.

Greece has enormous debts.  The deal with private creditors is needed to ensure the country reduces its debt level to 120pc of GDP by 2020 from its current position of 160pc.

But because of the contracting economy the indications are that even that figure is optimistic so the country is being asked to introduce further structural reforms in order to boost economic growth.

If a deal isn’t reached soon Greece will almost certainly default on a bond repayment worth €14.4bn in March.  That has potentially dangerous consequences for the world economy.