The International Monetary Fund (IMF) has today approved a €22.5 billion financial assistance programme for Ireland
In a statement today, the organisation said its executive board had sanctioned a three-year "extended fund facility" to support the Government's economic adjustment and financial stabilisation programme.
The fund arrangement of €22.5 billion is part of a wider €85 billion rescue package, comprising financial aid from the European Financial Stabilisation Mechanism and European Financial Stability Facility; bilateral loans from the United Kingdom, Sweden and Denmark; and Ireland’s contributions of €17.5 billion from the State's National Pension Reserve Fund and cash reserves.
“The Irish authorities have designed an ambitious policy package to address the economic crisis facing the nation,” IMF managing director Dominique Strauss-Kahn stated.
“It is a multi-year program targeting vulnerabilities in the banking system and aiming to restore prospects for growth - without which there can be no enduring solution to the crisis. The authorities designed a program with fairness in mind so that the burden of economic and financial adjustment is shared across all levels of society, with the most vulnerable groups the most protected.”
The financial assistance would allow time for Ireland to restore market confidence and foster renewed growth and job creation, Mr Strauss-Kahn said.
“The Irish economy faces a crisis without parallel in its recent history. The new program, building on the authorities’ recent efforts, steps up the pace and range of measures to address financial and fiscal stability concerns.
"A clear and realistic package of policies is set in a multi-year policy framework to restore Ireland’s banking system to health, place its public finances on a sound footing, and reclaim growth," he added.
"The fact that the IMF board approved this program, knowing that there is going to be an election in a few months, is a clear sign that the board believes that across the political spectrum there is a clear endorsement of the objectives," Ajay Chopra, deputy director of the IMF's European Department, told RTÉ.
"Of course different governments might have somewhat different priorities in the areas of achieving fiscal and financial stability, these would need to be discussed and as long as the priorities are consistent with meeting the overarching objectives, there is always room for discussion."
Mr Strauss-Kahn played down chances of substantial changes in the loan agreement even if the Opposition gains power next year.
"If they win the election, they'll come back arguing that this thing, which was proposed by the former government, should be done differently," Mr Strauss-Kahn said. "But I'm confident they won't question in any way the global framework of this agreement."
Last Friday, the IMF postponed consideration of the €22.5 billion loan to allow the Dáil time to discuss the wider joint IMF-European Union rescue plan.
The Government yesterday won a crucial Dáil vote on the €85 billion EU-IMF bailout package, with a comfortable majority of 81 votes to 75.
