Brussels, 08/02/2013 (Agence Europe) - Ireland is in the process of throwing off the yoke of control by international lenders, explained the troika of lenders (European Commission, ECB and IMF) on Thursday 7 February 2013 after their ninth fact-finding mission in the country. The troika's conclusions pave the way for release of €4 billion in aid from the IMF, €1.6 billion from the EFSF and €500 million from individual member states.
Technical level talks will now continue on how to prepare for an exit from the financial aid programme at the end of the year. Euro Commissioner Olli Rehn said that the major steps taken by the Irish government over promissory notes will help boost investor confidence and ensure a successful return to financial independence.
On 7 February, Dublin announced that it had reached what it described as a historic agreement with the ECB to reduce its financing needs by €20 billion over the next decade. The ECB agreed to extend the repayment deadline for loans for bailing out Anglo Irish Bank, known as “promissory notes,” as well as reducing the interest rates on them, turning the loans into bonds with an average maturity of 34 years (extendable to 40) from the present 7 to 8 years. The ECB Governing Council took note on Thursday of the Irish government's decision to wind up the Irish Bank Resolution Corp. (see EUROPE 10781). Irish Prime Minister Enda Kenny welcomed the arrangement to secure the country's future finances and reduce the debt burden on Irish taxpayers.
Ireland's performance in implementing its structural adjustment programme has been praised by the troika, which expects export-backed growth to return this year to the tune of 1% and grow to 2% in 2014. Domestic demand remains low, however, due to high levels of unemployment, an area the government is to focus upon with the aid of cash from the European Investment Bank. Dublin reached its deficit reduction targets in 2012 without any problem and the deficit is expected to fall as expected to 7.5% of GDP in 2013. The troika says that, to sustain the recent return of confidence on the markets, Ireland must keep up its good work and the Irish banks that the country was forced to bail out (requiring international aid to this end) are urged to improve the quality of their assets. The government is urged to take decisive action to ensure banks are able to lend to the real economy to underscore recovery. The next troika review is planned for April 2013. (EL/transl.fl)