Bailout review urges banks to receive direct recapitalisation from ESM

The IMF has urged that Irish banks receive direct recapitalisation from the European Stability Mechanism, which puts it on a collision course with the Eurogroup of finance ministers and the eurozone creditor nations.

In its ninth review of the Irish economy, as part of the bailout programme, the IMF said the restructuring of the €28bn in promissory notes in February will enhance Ireland’s debt sustainability over the near and medium term, but debt will remain high.

The banking sector remains fragile and, if growth in the economy undershoots, there will be renewed concerns over debt sustainability.