Brussels, 14/07/2011 (Agence Europe) - Ireland's international creditors say that the country is properly implementing the agreed three-year austerity programme introduced as one of the conditions for the €67.5 billion aid package. The Irish economy is expected to return to growth this year, the public deficit will beat the targets and the country's banks will receive a further batch of financial aid by the end of the month. These are the main findings of the second quarterly fact-finding mission by the troïka (the European Commission, the ECB and the IMF). All the objectives have been met, explained a representative of the European Commission at a troïka press conference in Dublin on Thursday 14 July. As the representative was speaking, hostile demonstrations were taking place in front of the European Commission's Representation Office. The troïka's positive assessment paves the way for the payment of the latest batch of aid, €2.5 billion from the EU and €1.5bn from the IMF, in addition to €500 million of loans from the United Kingdom.
In a press release, the troïka says that modest economic growth is expected in 2011, due largely to a surge in exports (despite falling household consumption), and the positive growth will carry over into 2012. The budget deficit for the first six months of 2011 is well below the upper limits set out in the aid programme and is expected to be below 10.5% for the year. Ireland's programme includes the following deficit targets: 10.3% in 2011, 9.1% in 2012 and 3% in 2015. The troïka is equally satisfied with the structural reforms and the recapitalisation of Irish banks (which will include unprotected shareholders losing cash) which will be finalised by the end of July. The restructuring of banking is running ahead of schedule, with Allied Irish Banks in the process of merging with EBS Building Society, in addition to the completed merger between Anglo Irish Bank and INBS. Reform of bank collective pay agreements is being negotiated with trade unions and the banks.
Quizzed about recent hikes in the interest rates charged for rolling over Irish debt, an IMF representative said the rates would be very different were it not for the risk of the eurozone sovereign debt crisis spreading to the entire EU17. He said it was crucial that a European solution was found for the private sector's involvement in the second Greek bailout. (M.B./transl.fl)