PARIS (MNI) – Ireland’s international creditors said Thursday that
the country’s bailout program remained on track and that “technical
solutions” were being considered to ease its debt burden.
The troika – the European Commission, the International Monetary
Fund and the European Central Bank – said following the seventh review
of Ireland’s E67 billion program that “policy implementation remains on
track despite challenging macroeconomic conditions.”
The troika’s statement said that creditors were working to “improve
the sustainability” of Ireland’s program in line with the conclusions of
the June 29 EU summit.
EU leaders decided at the summit that the European Stability
Mechanism will eventually be able to recapitalize banks directly without
adding to sovereign debt and that Ireland, which assumed a huge amount
of debt to stabilize its banking system during the height of the
financial crisis, should be able to benefit.
Irish Finance Minister Michael Noonan said at Monday’s Eurogroup
meeting that Ireland would be “ambitious” in seeking to renegotiate E30
billion in promissory notes that were issued to prop up the banks.
The troika said that market sentiment toward Ireland was becoming
increasingly positive.
“The notable decline in bond yields underlines the increasing
confidence in Ireland’s strong capacity to implement adjustment policies
and also reflects the recent euro area summit,” the troika statement
said. The confidence was also evident in Ireland “successful return to
the Treasury bill market at reasonable cost.”
While praising policy implementation, the troika noted that
Ireland’s economy remained weak and unemployment high. “Generating
growth and jobs on a sustainable basis remains a critical priority,” it
said.
Ireland reported Thursday that its economy contracted by 1.1% in
the first quarter after a revised 0.7% gain in the fourth quarter of
2011.
–Paris newsroom; +33142715540; jduffy@marketnews.com
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