Fund forced to deny it is poised to take economic control

THE International Monetary Fund was yesterday forced declare it was not poised to take control of the Irish economy.

Just a day after an Oireachtas committee complained Ireland now had the reputation as the “wild west” of European capitalism because of the failure in regulating the country’s banking system, the IMF move dealt another blow to global confidence in the Republic’s financial future.

The IMF, which has moved in to bail out failed economies across the Third World in the past, was forced to issue the denial after RTÉ reported Taoiseach Brian Cowen had “confirmed” the organisation may intervene to take charge of Ireland’s problems.

The IMF said it had no reason to think Ireland needed its help after it had moved in to support other nations like Iceland, Hungary and Latvia which have been ravaged by the financial crisis in recent months.

“The authorities have been clear today. We agree. There is no reason to think that IMF financing will be needed,” IMF spokesman William Murray said.

The IMF went public following a bizarre chain of events which saw the euro fall by more than a cent against the US dollar after international news wires picked up on an RTÉ report that Mr Cowen had “confirmed” the IMF may be needed to deal with Ireland’s financial crisis.

The Government is facing a borrowing requirement of €20bn this year due to the tax shortfall and a doubling of its debt/GDP ratio to over 40%, with market experts warning the country’s credit rating could be cut.

The currency markets stabilised after Mr Cowen insisted he had not made the remarks and RTÉ issued a correction.

However, the incident is likely to add to international concern about the state of the Irish economy and the Government’s ability to get a grip on the massive financial problems facing the country.

The embarrassing international incident followed the revelation the chairman of Anglo Irish bank Seán FitzPatrick had concealed loans totalling more than €87 million from shareholders over an eight-year period.

The Financial Regulator was condemned by an Oireachtas economic committee this week for not picking up on the scandal earlier and thus re-enforcing what TDs and Senators said was a widely held international view that the Irish financial sector was not properly controlled.