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20 October 2011

Statement by the EC, ECB and IMF on the review mission to Ireland


Policy discussions have been concluded with the exception of the specific fiscal measures to be included in Budget 2012, which are being determined by the Government and will be assessed by the three institutions in the coming weeks.

Programme implementation continues to be strong. The authorities have completed the key initial phase of the comprehensive financial sector reforms launched in March. The fiscal deficit limit of 10.6 per cent of GDP in 2011 is expected to be met and important structural reforms are being put in place. These strong policy efforts have underpinned the decline in Irish sovereign spreads in recent months, together with improved EU financing terms.

The authorities are firmly committed to fiscal consolidation to put the country’s debt on a downward path, by bringing the general government deficit to below 3 per cent of GDP by 2015. The forthcoming 2012 Budget will make progress along that path by implementing sufficient consolidation to limit safely next year’s deficit to no more than 8.6 per cent of GDP, striking a balance between debt reduction imperatives and limiting the drag on growth and job creation.

To underscore their commitment to sound fiscal policy, the authorities intend to update the medium-term fiscal consolidation plan in the coming weeks, with the supporting measures to be provided with the 2012 Budget. These measures will be guided by the authorities’ Comprehensive Review of Expenditure, enabling savings to be made in a targeted manner rather than through across-the-board cuts. We welcome the establishment of the Irish Fiscal Advisory Council and the release of its first fiscal assessment report.

The key initial phase of the comprehensive financial sector reforms launched last March has been implemented. Recapitalisation of the banking sector has been completed at a lower than expected cost to the budget, benefiting from private investor participation and burden-sharing with the holders of subordinated bank debt. Deleveraging of the banking sector is progressing as planned, despite challenging conditions and banks have secured term funding reflecting improved confidence. Further progress in these areas is needed to allow banks to fulfil their essential role in the economy.

Press release



© International Monetary Fund


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