Chopra points to five positives for Ireland

The head of the IMF mission to Ireland Ajai Chopra said today that the country should be judged on its own merits.

He said the Moody's downgrade of the country's debt to junk status was entirely due to contagion from the rest of the Eurozone.

He said that there are five positives for Ireland: the economy is stabilising, banks are being sorted out, the fiscal correction is on track, competitiveness is improving, and the Government has the political will and determination to implement the programme.

Mr Chopra also said that a European solution to a European problem is now needed.

“We need to keep in mind that the Moody’s downgrade was directly linked to the eurozone area policy stance,” he said.

“Rating agencies have got it wrong on the upside... It’s naturally possible they are getting it wrong on the downside by overestimating risks.”

The next IMF/EU review is in October.

European chiefs and the Irish Government have declared the Moody’s rating – two days before the EU/IMF report card was published – incomprehensible.

The review team suggested that the money market agency was more concerned with the potential deepening of the financial crisis and the risk of it spreading into Italy – one country too big to be saved by a bailout.

Mr Chopra added: “If it wasn’t for contagion we would be seeing a different result. The country needs to be judged on its merits.

“The downgrade is largely a reflection of events outside of Ireland.”