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Dublin passes troika review, looks to bailout exit

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(Globalpost/GlobalPost)

Ireland's bailout partners agreed Thursday to release another 2.6 billion euros ($3.5 billion) after Dublin passed its latest review, and have begun talks on preparations for its exit from the programme.

The so-called troika of lenders -- comprising the European Union, the European Central Bank and the International Monetary Fund -- revealed the news in its ninth assessment of the troubled eurozone nations.

"Ireland's strong track record of programme implementation has been maintained, contributing to substantial improvements in market access and conditions for the sovereign and also -- albeit more moderately -- for the banks," the troika said in a statement.

It added: "Mission teams also began discussions on how best to prepare for and support a successful and durable exit from programme financing."

The latest disbursement will comprise one billion euros from the IMF and 1.6 billion euros from eurozone partners. In addition, EU member states are expected to release a further 0.5 billion euros.

The troika meanwhile forecast that the Irish economy would grow by more than 1.0 percent this year, and by more than 2.0 percent in 2014, with activity driven by strong exports.

Ireland was forced to take an 85 billion euro rescue from the IMF and the European Union in late 2010 when massive debts left it on the brink of collapse.

It hopes to become the first bailed-out eurozone nation to exit its rescue programme by returning fully to the sovereign markets by the end of 2013.

On Thursday, Ireland reached a landmark deal with the ECB to re-structure the massive debts of the former Anglo Irish Bank, which will ensure repayments were reduced and spread over a longer period, easing the pressure on Dublin.

The troika praised the government's overall efforts, noting it comfortably met its 2012 fiscal targets but warned that unemployment -- at 14.6 percent -- remains stubbornly high, and is increasingly long-term in nature.

"Reducing it must remain an urgent policy priority. Stepped-up efforts to help the long-term unemployed are needed," they said.

Market conditions for Irish bonds continue to improve, with benchmark eight-year yields now below 4.5 percent. Dublin recently returned to the bond markets with strong demand from investors.

"The completion of the (latest review) programme conditions brings to over 190 the number of commitments that have been fulfilled on time and we have now drawn down some 84 percent of the available funding," the Department of Finance added in a separate statement.

"Our focus is now firmly on our exit strategy from the programme, our re-entry into the financial markets and the debt sustainability of the programme," it added.

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http://www.globalpost.com/dispatch/news/afp/130207/dublin-passes-troika-review-looks-bailout-exit