Troika approves bailout compliance
The EU, European Central Bank and International Monetary Fund also said Ireland was in the best position to take advantage of more flexible loan terms, as proposed by eurozone members this week.
However, the troika warned of challenges to come in the next budget even as it approved the latest three-month review of the country’s bailout terms.
At a press conference in Dublin, the troika said the targets for borrowing the €67.5 billion in loans were on track.
Following an almost two-week assessment of Ireland’s finances at government departments, the lenders also praised efforts to cut costs and reform the banks.
European Commission representative Istvan Szekely said: “There was no target that was not met.”
However, he said the next review of Ireland’s bailout terms, due in September, would be challenging.
“Important structural reforms are coming up.”
Reforming low wage-setting agreements, opening up competition in certain professions and plans for the upcoming budget are all set to feature on the agenda.
Ajai Chopra, heading the IMF team in Ireland, outlined five key points where Ireland was progressing in trying to cut its deficit, including recapitalising the banks, the contraction of the economy and increased competitiveness.
The Government’s fiscal programme aimed at cutting the country’s deficit to below 3% of GDP in 2015 was on track, he added.
Commitments for the EU/IMF third review included the roll-out of banking regulations here, the jobs initiative, the creation of the Fiscal Advisory Council and the examination of Exchequer returns.
Mr Chopra said Ireland’s progress needed to be isolated from Moody’s downgrading of the country’s credit rating to junk status.
“The country needs to be judged on its own merit. The good prospects of getting back to market access. This programme is fully financed through to the end of the programme.”
But he warned about cuts affecting poorer parts of Irish society.
“The adjustment to the boom that took place in the mid-2000s in Ireland has been very wrenching... the poor and most vulnerable segments of society do need to be protected,” Mr Chopra said.
Ireland, unlike Greece, was meeting targets of the loan agreement, he added, and the cost of borrowing on the international markets should have fallen by now.
The troika approval of the bailout terms means the Government can draw down some €4bn of the total €67.5bn loan, after borrowing €23bn so far.
