Press Release: Joint Statement on Ireland by EU Commissioner Olli Rehn and IMF Managing Director Dominique Strauss-Kahn

IMF News, November 28, 2010

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Canonical URL: Press Release: Joint Statement on Ireland by EU Commissioner Olli Rehn and IMF Managing Director Dominique Strauss-Kahn

“We strongly support the economic program announced today by Ireland.”
The program is characterized as “a forceful response to vulnerabilities in the banking system imposing a heavy cost on the budget and, in turn, hurting the prospects for growth.”
It “articulates a clear strategy for tackling today’s problems and for harnessing the enormous growth potential of this open and dynamic economy.”

Objective: “create a smaller banking sector that is robust and well capitalized, and able to serve the needs of Ireland’s economy.”
Key elements described:
- Reorganize the banking sector while deleveraging the banks.
- Inject fresh capital into the banks.
- Strengthen regulation and supervision “to prevent a repeat of the costly mistakes of the past.”
Result sought: “a smaller banking sector that is robust and well capitalized.”

The program provides “a road map for sound public finances by setting strong, upfront actions in a multi-year framework.”
Fiscal stance: spells out both spending and revenue efforts over several years “to repair the budget position, with due regard for Ireland's system of strong social protection.”

Implementation requirement: “Swift and sustained implementation of this program” and “carrying out this plan calls for a sustained effort by the government and people of Ireland.”
Expected outcome: “stable, job-creating growth.”

International support: “The EC and bilateral lenders—together with the international community through the IMF—will offer financing that will be complemented by the Irish authorities so as to amount to €85 billion.”
Purpose: “By shielding Ireland from the need to go to the markets for a considerable period of time, this support places financing at Ireland's disposal on more favorable terms than it could obtain elsewhere for the foreseeable future.”
Banking funding assurance: includes “the buffer of €17.5 billion from the nation’s cash reserves and other liquid assets.”

Press Release: Joint Statement on Ireland by EU Commissioner Olli Rehn and IMF Managing Director Dominique Strauss-Kahn; November 28, 2010.