PARIS (MNI) – Ireland’s implementation of its E85 billion bailout
program remains “steadfast” and should help the country on its way to
regaining market access, international creditors said on Thursday.
The troika – the European Commission, the IMF and the European
Central Bank – gave Ireland a positive assessment on the eighth review
of its program. It said in a press release that Ireland would meet its
deficit target for 2012 of 8.6% despite some spending overruns and was
committed to its 7.5% target for 2013.
“Policy implementation remains steadfast despite the challenging
external environment, helping Ireland to start to regain market access,”
the troika said.
Ireland’s economic recovery should continue, thanks largely to
exports, with domestic demand continuing to decline as households try to
reduce debt amid high unemployment. GDP growth this year should be
around 0.5%, rising to “just over 1%” next year.
Greater efforts were needed to deal decisively with Irish bank
mortgage arrears and to further reduce bank operating costs, the troika
said. An orderly phasing-out of the Irish government’s guarantees on
bank deposits and some bank bonds would help to improve profitability of
the sector, the report said.
Market conditions for Irish bonds were “much improved,” the troika
said, reflecting hopes for an Irish deal on debt relief and the overall
effect of the European Central Bank’s OMT program on markets.
“Ireland has started to regain market access, including through
government bond issues,” the troika statement said. “This achievement,
despite Ireland’s still rising public debt, underlines investor
confidence in Ireland’s capacity to implement adjustment policies as
well as market expectations of European support for Ireland.”
The statement said that EC/ECB/IMF teams “continued to discuss with
the authorities possible technical solutions to improve the
sustainability” of Ireland’s program, but provided no details.
–Paris newsroom, +33142715540; jduffy@marketnews.com
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