EU must cut burden of bank debt: IMF

Warnings that Ireland’s economy could stagnate, leaving the country in a distressed state for years, came from the IMF yesterday as it insisted the EU must help cut the burden of bank debt.

It urged agreement to restructure the €31bn Anglo Irish promissory notes well before next March when the next tranche of €3.1bn becomes due, and gave a very sizeable and unusual nudge to the ECB on this issue.

But it stressed that the country also needs a deal on the additional €31bn it ploughed into its pillar banks before the bailout, and suggested the EU’s rescue fund, the ESM, give full value for them of around €24bn — compared with the €8bn current value mooted.