IMF report casts doubt on 2013 return to markets

The International Monetary Fund (IMF) has said there is uncertainty about whether Ireland can return fully to the bond markets as planned next year.

In its latest staff report following a review of Ireland’s compliance with its bailout conditions, the IMF said other eurozone countries must act to ensure the conditions are right for Ireland to get funding.

The report praises the Government's implementation of the bailout deal and what it calls the innovative approach to tackling the household debt crisis.

But it warns that unemployment remains unacceptably high, increases in welfare spending are the highest in Europe, and there is a danger banks won't lend enough money into the economy.

It said the plan to return to the bond markets later this year in a modest way should see positive results.

But it warned that the plan to achieve full funding from the markets next year is uncertain, mainly because of a European recession, the continuing debt crisis and sluggish export growth.

The report calls on European authorities to proactively take steps to reinforce the prospects of Ireland having adequate market access in 2013.

Such steps, it says, could help Ireland avoid ongoing reliance on official funding, and would also contribute to overall European economic stability.