International Monetary Fund welcomes Ireland’s new austerity budget
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