IMF says Ireland ‘on track’ with recovery plan

IRELAND is making progress in overcoming the worst economic crisis in recent history and is on track to achieve the targets set out for this year, according to the latest report from the IMF as it agreed to release the next tranche of money.

Tue, 17 May, 2011 - 01:00

Ann Cahill, Europe Correspondent

But it says that more progress could be achieved with the help of a more comprehensive European plan that would help overcome market doubts, regain market access, reduce the threat of spillovers and bring about a recovery of the Irish economy.

As a result of the positive report following the recent visit to Dublin by the experts from the IMF, the ECB and the European Commission, the IMF said it has agreed to release €1.85 billion to Ireland of the €21.8bn in total they have committed, bringing the total disbursed so far to about €7.2bn.

The changes made by the Government to the original programme, including restoring the minimum wage, tax and expenditure and the jobs initiative, were budget neutral and consistent with the goals of restoring the country’s finances.

IMF deputy managing director Naayuki Shinohara said, “Ireland’s economic programme is off to a strong start. Resolute policy implementation by the authorities has kept the programme on track during a period of political change and an unsettled external environment”.

The IMF praised the comprehensive reforms and recapitalisation of the banks, saying they were a major step towards restoring the banking system.

But they warn that rigorous management will be required to implement the banking reforms including working out problem loans on the basis of best international practices to help banks borrow again on the market.

Finance Minister Michael Noonan welcomed the IMF’s announcement.

“I am particularly pleased at the IMF’s strong endorsement of the new Government’s approach. Ireland’s economic programme is off to a strong start. Resolute policy implementation by the authorities has kept the programme on track during a period of political change and an unsettled external environment,” he said.