The Department of Finance of Ireland said that the country has met commitments under its international bailout program by implementing the latest EU-IMF-ECB troika review of the €85 billion programme. Earlier, the country was rescued by IMF and Europe in 2010 and then it had agreed for three year bailout program.
In a statement the department said that it is continuing to meet the set targets and has drawn down about 91 per cent of the available funding. Unlike Greece and Portugal, Ireland seems to have followed what it was advised by the EU and it will be the first bailed-out euro zone economy that will not need emergency funds if exits successfully later this year.
Earlier the last month Reuters had reported that Ireland’s economy slid into recession and continued to contract sharply in early 2013. However, the EU which wants to show other ailing economies is desperate that Ireland exits the bailout program successfully. Ireland’s example will set precedence for Portugal and Greece and other ailing economies in Euro Zone for recovery.
The mild growth that the national economy of Ireland received seems a result of harsh spending cuts and tax hikes that aimed to reduce the country’s budget deficits. Additionally, the country also issued a ten-year bond in March this year and paid the debts periodically in the last 12 months to meet the funding needs.
Reports are rife that Irish debt managers cashed in the opportunities and raised funds as the country’s fiscal credibility improved and bond yields subsided. Nonetheless, Ireland’s successful exit from the bailout program later this year will be hailed as a remarkable achievement for Euro zone which is reeling under recession.
The Problems are far From Over
Though Michael Noonan, the Finance Minister of the country is confident about the exit from the bailout program later this year, he is still seeking some sort of support from IMF and EU post-bailout exit. But reports also say that the country is not just looking for a credit line to get funds from these bodies but also wishes to become eligible for the ECB’s OMT program.
OMT or Outright Monetary Transactions is a program of the European Central Bank. It aims at safeguarding an appropriate monetary policy transmission, and the singleness of the monetary policy. Additionally, it will enable the bank makes purchases in secondary, sovereign bond markets; however, this can be done only under special conditions.