latest EU-IMF
review & what the Government's two ministers reported today
THE
full text statement issued today Thursday by Michael Noonan and Brendan Howlin
after the sixth Troika inspection completed successfully.
Ireland has successfully concluded the sixth review
of the Programme with the EU Commission, the ECB and the IMF. In line with each
of the previous five quarterly reviews Ireland has continued to achieve all of
the targets set under our programme of assistance.As part of the review mission, which begun on 16th
April, there has been a detailed assessment of fiscal developments,
The
macroeconomic outlook, progress on commitments in the restructuring of the
financial sector and in structural reform. The review also provides for
discussions between the Government and the external partners on adapting the
Programme of Assistance, which improves its effectiveness by supporting the
economy’s potential to grow and create jobs.
On welcoming the successful conclusion of the
review, Minister Noonan and Minister Howlin stated:
“We are pleased that we have met our targets, all
measures have been implemented and the programme is on track. This successful
outcome illustrates, once more, the ability and the commitment of the Irish
State to implement a challenging programme effectively.
Economic data released since the last Troika review
in January has shown that the Irish Economy has returned to growth in 2011, the
first time since 2007, our underlying deficit for 2011 is 9.4% – significantly ahead of the
target of 10.6%, our tax take is growing and we are on track to meet our 8.6%
deficit target in 2012.
Over 100 actions have been completed under the
programme and over 70% of the available funds have been drawn down. Stability
has been restored to the public finances, a range of structural reforms have
been introduced and the financial sector is refocused on meeting the needs of
the Irish economy.
As well as examining programme implementation over
the past quarter over the course of this mission we have begun to examine
measures to strengthen the focus on growth. The revised MoU contains a
commitment to strengthen the growth pillar of the programme.”
Minister Noonan stated:
“Agreement has been reached, in line with the
programme commitments, on the strategic direction for Permanent TSB, with a
formal Restructuring Plan to be submitted to the European Commission by the end
of June. The objective of this plan is to create a viable retail bank focused
on lending into the Irish economy. This will be achieved by carving out a
viable bank from the current Permanent TSB business.
On the wider banking sector we remain committed to
preparing our banks for the future and ensuring their capital strength. The
Government’s overall objective is to return the banks to private ownership and
to maximize the return on the taxpayer’s investment in the banks.
Stability is being restored to the banking sector,
relationship frameworks have been introduced, deposits have stabilized and the
deleveraging programme is on target. The normalization of our banking system is
an ongoing process. Reflecting this more normal situation the Central Bank will
align the next PCAR exercise with the EBA stress tests that will be held in
2013.
The banks’ focus will be on more normal operations
such as mortgage and SME lending, tackling the problem of mortgage arrears and
debt recovery. Ireland continues to have the most prudent capital requirements
of any European country. The steps outlined above reinforce our key objective
of getting credit to the domestic economy and helping to create jobs and
growth.”
Minister Howlin on the conclusion
of the visit stated;
“For the sixth consecutive review Ireland has met
the challenging targets under the programme. We are committed to achieving
economic recovery and creating more jobs. We have agreed with the Troika that a
higher proportion of the proceeds from the sale of state assets will be used to
support jobs and economic growth. The exact quantum (above the 1/3 of proceeds
already agreed) is yet to be determined but I am confident that we will be
successful in this regard. We need to implement the plan but also we need
economic stimulus and growth; I welcome the acknowledgement of our troika
partners of the importance of the growth agenda to the overall success of the
programme.
Over the course of the quarter there has been a
considerable reduction in the numbers in the public service which will deliver
long term sustainable paybill savings. Furthermore, we will continue to
actively manage expenditure and I am confident that we will adhere to our
spending targets in 2012 as we did in 2011.
The programme is a process and we have made significant progress in our first year; including a reduction in the interest rate that will save us €10 billion, restoring the minimum wage and we are putting in place legislation to underpin Joint Labour Committees.
I welcome the endorsement by the troika that Ireland has met all targets to date and the programme remains on track. The Government is committed to meeting our targets under the programme as continuing to do so is the best way of ensuring Ireland succeeds and for us to return to the market and fund ourselves independently.”
Both Ministers concluded:
“We welcome the fact that our programme remains on track and we continue to meet all our targets. In the first quarter 2012 we have seen robust tax returns and we continue to control our public expenditure. There remains a challenging road ahead but we remain fully committed to reducing our deficit to 3% of GDP by 2015 and we are confident that the 8.6% target for 2012 will be met. This Government is focused on creating jobs and restoring Ireland’s economic sovereignty; the successful implementation of the programme as well as endorsing the upcoming stability referendum will put us on this path.”
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