IMF: Govt must tackle mortgage arrears

The International Monetary Fund has said sorting out mortgage arrears and getting Europe to restructure bank debt are vital if Ireland is to exit the bailout by year's end.

In its latest review of the Troika programme, the IMF also warned that despite the promissory note deal, the Coalition cannot back away from any budget cuts or taxes.

Noting inadequate progress on resolving mortgage arrears the IMF said this issue is central and it goes on to welcome the Coalition's new mortgage resolution process announced last month.

They said full implementation of Budget 2013 remains critical and any savings from the promissory note deal should only be examined for Budget 2014.

However, in a warning shot to the ECB and European Commission, it said the durability of Ireland's exit from the programme hinges on a timely delivery of the ESM direct bank recapitalisation.

It said any slowing of economic growth, further instability in the housing market or failing to deal with mortgage arrears would strain Ireland's ability to rely fully on the markets.

The IMF's Mission Chief for Ireland, Craig Beaumont, has said the durability of Ireland's exit from the programme hinges on a timely delivery of the ESM direct bank recapitalisation.

Mr Beaumont has warned that more needs to be done to help Irish jobseekers get back to work.