The International Monetary Fund (IMF) approved the release of €1.48 billion to Ireland under the international rescue plan saying the country is ahead of schedule on legal restructuring of banks.
“The authorities are pushing forward financial sector reforms which are at the heart of Ireland’s response to the crisis. Bank recapitalization has been completed with welcome private investor participation. Legal restructuring of banks is ahead of schedule and their boards and management teams are being renewed,” the IMF said in a statement in Washington on Saturday.
Ireland is due to receive an additional €2.5 billion in European aids by the end of September and another tranche of €3 billion by the end of October, the European Union said in Brussels on Saturday. Britain is also expected to chip in another €500 million, the EU added.
Ireland is targeting to cut its budget deficit to 3 per cent of GDP by 2015 and has already accepted an international rescue package of €85 billion last year. The government will revise its growth forecast for the year and may also cut growth forecast for 2012 from 0.8 per cent published earlier this year, said finance minister Michael Noonan.
The Irish Republic’s budget deficit widened to €20.4 billion in the first eight months through August compared with a shortfall of €12.1 billion last year. The central bank governor Patrick Honohan urged lawmakers to consider a faster approach to reduce and said the current plan is “minimum required to ensure stability.”
“The Irish authorities have maintained resolute implementation of their economic program. The economy is showing signs of stabilization and financial market conditions have also recently improved,” observed the IMF.
“Ireland’s economy, however, faces a weakening in trading partner growth, which could dampen the pace of Ireland’s recovery in the near term,” the multilateral lender observed.