Brussels, 08/11/2013 (Agence Europe) - On Friday 8 November, the troika of lenders (European Commission, European Central Bank and International Monetary Fund) left Dublin after its final monitoring mission, giving a positive assessment of the country's accomplishments under the aid programme agreed in 2010, along with some final recommendations.
In a joint press release, the troika says: “Strong policy implementation by the Irish authorities and European decisions have improved funding conditions” and programme implementation will be completed in the next few months, but Ireland must not rest on its laurels. Instead, “spending control must be maintained, in particular in the health care sector, to ensure the 2013 fiscal deficit target of 7.5 percent of GDP is comfortably met. Budget 2014 targets a primary balance and an overall deficit of 4.8 percent of GDP, which is more ambitious than the deficit ceiling of 5.1 percent of GDP set under the Excessive Deficit Procedure. To reach these goals, Ireland's record of strong budget implementation needs to continue. Realising the proposed savings in health expenditure, while protecting core services, will require particular attention ».
The troika notes: “Financial sector repair continues, though the share of non-performing loans remains high and lending sluggish. The introduction of a target regime for arrears resolution has been helpful, but greater efforts are required by banks to find long-term sustainable solutions for borrowers in genuine mortgage distress. (...) An assessment of bank balance sheets is advancing and should be completed before the conclusion of this review. The main Irish banks will undergo a risk assessment, asset quality review and stress test, in the context of the upcoming euro area-wide comprehensive assessment” by the ECB.
“Unemployment has begun to decline but remains very high,” explains the troika, saying that “additional redeployment of resources is needed to ensure meaningful engagement with job seekers, especially the long-term unemployed, and to provide training relevant to the job market.” “Overall, however, Ireland is expected to record low growth in 2013. A somewhat higher growth rate, of about 1¾ percent, is projected for 2014, as trading partners also begin to recover.”
Dublin is due to quit the aid programme in mid-December and the troika missions will end at the close of the year. The “two-pack” of Stability and Growth Pact legislation foresees post-programme surveillance for eurozone nations that have received financial aid and until they have paid back 75% of the loans, they will be subject to strict surveillance. (EL/transl.fl)