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13 December 2013

IMF completes twelfth and final review under the Extended Fund Facility arrangement for Ireland


The completion of the review enables the disbursement of an amount equivalent to about €0.65 billion, bringing total disbursements under the EFF to the equivalent of about €21.81 billion, or the equivalent of 1,548 per cent of Ireland's IMF quota.

This is the last review under the EFF arrangement, which will expire on December 15. Owing to steadfast policy implementation by the authorities, the EU-IMF supported programme has been completed successfully...

After the expiration of the EFF arrangement, Ireland and the IMF will continue to maintain a constructive policy dialogue. In accordance with Fund policy, Post-Programme Monitoring (PPM) will now be initiated.

Following the Executive Board’s discussion, Ms Christine Lagarde, Managing Director and Chair, said: “With today’s approval of the 12th review Ireland has successfully completed its EU-IMF supported programme. Steadfast policy implementation by the Irish authorities has underpinned the achievement of core programme objectives: stabilising the financial sector, significantly improving the fiscal position, and regaining market access. Renewed job creation and a range of positive indicators signal an emerging recovery. As a result, Ireland is now in a much stronger position than when its programme began.

“Yet Ireland still faces significant economic challenges. Unemployment is too high, public debt sustainability remains fragile, and heavy private sector debts and banks’ slow progress in resolving nonperforming loans weigh on domestic demand. Continued concerted policy implementation is therefore necessary for Ireland to recover fully from the crisis.

“Steady fiscal consolidation has been a hallmark of Ireland’s programme with deficit targets again expected to be met in 2013. Budget 2014 sets out a balanced pace of adjustment in coming years, as needed to put public debt on a declining trajectory. To limit the drag on growth, revenue increases should focus on further broadening the tax base, and reforms of health, education, and social protection spending should be undertaken while protecting core public services and the most vulnerable.

“To help revive lending and sustain a recovery in demand, efforts to resolve mortgages in arrears should be intensified. The recent bank balance sheet assessment—an intensive analysis conducted by the Central Bank—found additional provisioning to be appropriate. Results should inform banking supervision and banks’ preparations for the Comprehensive Assessment in 2014, for which an ESM recapitalisation backstop is desirable.

“Reducing unemployment is a central priority, requiring improved employment services and training for jobseekers, together with steps to promote credit to SMEs, where the support of European partners is welcome.

“The government’s decision not to request a successor programme is welcome. Ireland’s track record within its EU-IMF supported programme bodes well for its success in tackling these remaining challenges and the Fund looks forward to continued constructive engagement with the Irish authorities.”

Full press release

Reports from Irish Ministry of Finance:



© International Monetary Fund


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