18.05.2011 - 2011 Spring review of the EU/IMF financial assistance to Ireland, the basis for the release of the second installment of the EU loan to Ireland (EUR 3 billion) by the European Commission.
This article reports on the discussions that took place between the Irish authorities and a joint EC-ECB-IMF mission over 5-15 April 2011 in Dublin.
The mission focused on a review of policy conditionality under EU/IMF financial assistance programme to Ireland up to end-March 2011, on the economic outlook for Ireland, and the policy challenges.
The mission found that the economy is rebalancing away from domestic demand and towards net exports, in line with programme expectations. Barring a minor downward revision in the growth forecast for 2011 (to 0.6%, down from 0.9% at the time of the launching of the programme in late 2010), the macroeconomic framework of the programme remains appropriate.
Programme implementation has been strong: fiscal targets have been met (or are on track to be met), a comprehensive strategy to recapitalize, restructure, and deleverage domestic banks has been developed based on thorough stress-tests, and steps have been taken towards the programme's structural reform objectives. Importantly, the new government has taken full ownership of the programme.
Going forward, continued strict programme implementation remains essential to buttress credibility in the policy framework and in the achievability of the programme consolidation objectives.