EU rescue fund ‘should take over Ireland’s banks’

The IMF recommends that the eurozone’s rescue fund, the European Stability Mechanism (ESM), take temporary control of the Irish banking system as one possible solution to improving lending to the economy and help the overall recovery.

Moreover, the IMF urged EU leaders to follow through with the commitment made at the Jun 29 EU summit to break the link between sovereigns and banks across the region, which would greatly alleviate Ireland’s debt burden.

If the ESM invested €24bn in Irish banks and the Government used the proceeds to pay down debt, it would reduce the national debt from 119% to 105% of GDP in 2013, the IMF noted.