EU more optimistic than IMF on an Irish market comeback

AFP, Friday 9 Sep 2011

Ireland is making progress in fixing its wrecked finances, recapitalising the banking sector and likely returning the economy to growth this year, the European Commission says

The European Commission voiced optimism on Friday that Ireland was on track to return to the borrowing market, offering a brighter assessment than the IMF issued this week.

Irish authorities have made progress in fixing the nation's wrecked finances, successfully completing the recapitalisation of the banking sector while the economy is expected to return to growth this year, the commission said.

"Usually we are very prudent in our assessments... In this case we are particularly optimistic," Amadeu Altafaj, spokesman for EU economic affairs commissioner Olli Rehn, told a news briefing.

"We think the conditions are in place to be optimistic ... in the possibility of Ireland coming back to the markets as foreseen," he said, adding however that it was premature to set a date.

While Ireland's financing needs are covered by the EU-IMF bailout through 2013, the head of Ireland's debt agency said Friday he hoped the country could begin a "phased" return to the sovereign bond market late next year.

The timing, however, "will depend on many different circumstances -- national and international -- and our continued success in implementing the EU/IMF (bailout) programme," National Treasury Management Agency chief executive John Corrigan told lawmakers.

The European Commission, the International Monetary Fund and the European Central Bank form a "troika" that reviews Ireland's implementation of austerity measures in return for the 85-billion-euro rescue funding.

In a report issued Friday summarising the troika's findings after a July mission, the commission said Dublin had made "important progress" in its efforts to clean up public finances and strong exports were driving the recovery.

The IMF said in a separate report Wednesday that "recent market developments have raised doubts about the feasibility of regaining market access, even though they are largely driven by external factors."

Craig Beaumont, head of the IMF mission in Ireland, later told reporters that that view may have improved.

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