IMF steps in to rescue Ireland

AFP, Friday 17 Dec 2010

Ireland was rescued by the international monetary fund with an aid package worth $30.1 billion, in order to get out of its debt crisis

Ireland debt forced the EU to finance the country with 22.5 billion Euro. (photo: Reuters)

The International Monetary Fund gave Ireland a green light Thursday to borrow 22.5 billion euros ($30.1 billion)to battle an economic and banking crisis.
About 5.8 billion euros is immediately available to Ireland, the IMF said in a statement.
The fund's executive board approved a three-year loan for Ireland "to support the authorities' economic adjustment and financial stabilization program," the 187-nation institution said.
The IMF loan is a key part of an 85-billion-euro financing package arranged by the IMF and the European Union to help Ireland survive a debt crisis.
"The Irish economy faces a crisis without parallel in its recent history. The new program, building on the authorities’ recent efforts, steps up the pace and range of measures to address financial and fiscal stability concerns," IMF managing director Dominique Strauss-Kahn said in the statement.
"A clear and realistic package of policies is set in a multi-year policy framework to restore Ireland’s banking system to health, place its public finances on a sound footing, and reclaim growth."
The loan approval came a day after Ireland's parliament voted narrowly in favor of the proposed EU-IMF bailout.
Ireland's Dail, or lower house of parliament, voted by 81 to 75 Wednesday to approve the bailout worth after Finance Minister Brian Lenihan said it was the only basis for recovery of the battered Irish economy.
The IMF last week had delayed an executive board vote on the rescue plan until the Irish parliament took action on the preliminary agreement reached in late November.
Ireland, rocked by bank bailouts, a property market meltdown and recession-ravaged tax revenues, has unveiled austerity plans to slash a huge deficit and save 15 billion euros by 2014.
The bailout plan is at the center of a political firestorm in the eurozone country, once dubbed the Celtic Tiger for its fast-growing economy.
An opinion poll published Thursday showed the popularity of Prime Minister Brian Cowen and his ruling party has been hammered by the fallout from the country's financial crisis.
The poll ratings for Cowen, his government and his centrist Fianna Fail party in the Irish Times/IPSOS MRBI poll all dropped to record lows since MRBI began polling for the newspaper in 1982.
The setback comes as Cowen and his Fianna Fail/Green party coalition face a general election early next year after all parliamentary votes have been completed for an austerity budget that has slashed spending and raised taxes.
Strauss-Kahn said at a news forum Thursday that he believed the arrival of a new government after the 2011 Irish elections would not change the outlook for the bailout program.
"We will have elections and we will see. What I'm confident in is that even if the opposition parties, Fine Gael and the Labour, are criticizing the government and the program, which is just fair, when you read cautiously what they’re writing they understand the need of implementing the program," he told reporters at a forum organized by Thomson Reuters in Washington.
The IMF loan to Ireland was under the Extended Fund Facility, a program that gives "breathing room" for countries needing to address structural weaknesses to restore economic health.
The EFF has a repayment period of between four and a half and 10 years.

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