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Ireland passes latest IMF program review

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(Globalpost/GlobalPost)

The International Monetary Fund said Friday it was ready to disburse a fresh round of bailout funds to Ireland after completing a new review of the country's reform program.

The IMF said the ninth review concluded that Ireland's "strong policy implementation has continued and positive signs are emerging" in the economy, after two years and three months under the 85-billion-euro ($110 billion) EU-IMF rescue.

Completing the review means the IMF can disburse another 970 million euros from its 22.6-billion-euro share of the bailout.

"The Irish authorities have pursued steadfast policy implementation for more than two years and positive results are emerging," said IMF First Deputy Managing Director David Lipton.

"Recent economic indicators suggest a nascent revival of domestic demand, Irish bond yields have fallen to pre-program levels, and the government's market access has deepened."

The IMF said the country still faces significant challenges: unemployment above 14 percent, and a banking sector burdened by non-performing loans amounting to 25 percent of all loans.

Lipton said that dealing with the bad loans problem "is a key to economic recovery."

He urged European authorities to quickly follow up on pledges to further support the government, which could help wean the banks from official support.

That "would go a long way toward Ireland's durable exit from drawing on official support," Lipton said in a statement.

Early this month, EU finance ministers requested that the so-called troika of bailout lenders -- the European Union, the European Central Bank and the IMF -- consider extending maturities on their Irish and Portuguese loans, to ease the burden on governments as they struggle to spark economic turnarounds.

Speaking in Dublin on March 8, IMF Managing Director Christine Lagarde said the global crisis lender was open to changing the terms of Ireland's bailout program.

"We have an open mind about many issues, many of the terms and conditions of the exit strategy and as far as the adjustment to the loans," she said.

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http://www.globalpost.com/dispatch/news/afp/130322/ireland-passes-latest-imf-program-review