In­ter­na­tional Mon­e­tary Fund wel­comes Ire­land’s new aus­ter­ity bud­get

The Pak Banker - - International3 -

DUBLIN: The In­ter­na­tional Mon­e­tary Fund has wel­comed the Ir­ish par­lia­ment's ap­proval of its 2011 bud­get that meets Euro­pean Union and IMF re­quire­ments to se­cure an 85 bil­lion euro in­ter­na­tional bailout loan for the coun­try.

"We wel­come ap­proval of the 2011 bud­get... This is a clear sign of Ire­land?s strong com­mit­ment to tackle its prob­lems and har­ness the im­pres­sive growth po­ten­tial of this open and dy­namic econ­omy," the Washington-based IMF said in a state­ment. The IMF board of di­rec­tors will take up on Fri­day Ire­land's Novem­ber 28, three­year bailout loan request of 22.5 bil­lion eu­ros.

The rest of the loan up to 85 mil­lion eu­ros will come from the EU. News of the global fi­nan­cial body's en­dorse­ment of the new bud­get fol­lows Ire­land's an­nounce­ment that it will shave a fur­ther 6.0 bil­lion eu­ros (8.0 bil­lion dol­lars) from its ex­pen­di­ture next year via tax hikes and spend­ing cuts.

Fi­nance Min­is­ter Brian Leni­han, de­liv­er­ing his 2011 bud­get to the Dail, or lower house of par­lia­ment, said he would make the sav­ings as part of a four-year plan to slash a huge deficit by a to­tal of 15 bil­lion eu­ros.

"As out­lined in the plan, six bil­lion eu­ros of the over­all ad­just­ment is made in to­day's bud­get. The scale of this ad­just­ment is de­mand­ing but it demon­strates the se­ri­ous­ness of our in­tent," Leni­han told law­mak­ers. Ire­land's bud­get comes at a crit­i­cal time for the for­mer Celtic Tiger nation, whose 85bil­lion-euro bailout was for­mally adopted by EU fi­nance min­is­ters on Tues­day.

Fi­nan­cial mar­kets are on edge over the eu­ro­zone debt and deficit cri­sis, which has also sparked an in­ter­na­tional bailout for Greece.

Ire­land's gov­ern­ing Fianna Fail/Green party coali­tion, led by Prime Min­is­ter Brian Cowen, is cling­ing to power amid pub­lic anger over the eu­ro­zone na­tions' debt cri­sis.

"This has been a trau­matic and wor­ry­ing time for the cit­i­zens of our coun­try," Leni­han said on Tues­day.

"They are concerned that we have to seek ex­ter­nal sup­port to help us with our eco­nomic and fi­nan­cial dif­fi­cul­ties. They are wor­ried about the im­pact of this mo­men­tous and dif­fi­cult de­ci­sion on their lives."

The nation's cash-strapped coali­tion govern­ment only re­cently ap­plied for the enor­mous bailout loan from the Euro­pean Union and the In­ter­na­tional Mon­e­tary Fund.

Leni­han on Tues­day said Ire­land ur­gently needed the EUIMF cash to break out of a "vi­cious cy­cle" whereby in­ter­na­tional in­vestors were rapidly los­ing con­fi­dence in the govern­ment's abil­ity to con­trol the pub­lic fi­nances.

The Ir­ish govern­ment wants to slash the coun­try's pub­lic deficit from about 32 per­cent of GDP this year, to be­low the EU tar­get thresh­old of 3.0 per­cent by 2015. -Afp

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