Ireland to leave EU bailout this year


  By Martin Kelly
Ireland’s Taoiseach Enda Kenny has confirmed the country will leave the international bailout programme by December this year.
“The economic emergency will be over…the era of the bailout will be no more.” Mr Kenny told party members at the Fine Gael conference this weekend.

He added: “But the exit from the bailout is not an end in itself.  In fact it’s just the beginning.  The beginning of our freedom to choose the kind of Ireland we want to build.”

The Republic will exit the bailout on December 15th, ending a three year enforced austerity programme that resulted from the collapse of one of its biggest banks in 2010.  An 85bn euro bailout was agreed with the EU and the IMF.

The Irish economy grew by 0.9% in 2012.  In 2013 growth fluctuated between growth and contraction, however the second quarter of this year saw growth of 0.4%.

Fears that the country would have to apply for precautionary credit in order to exit the bailout were dispelled by EU Economic and Monetary Affairs Commissioner Olli Rehn, who hailed the strength of the Irish recovery and also that of Spain.

“Thanks to the economic turnaround supported by the programmes in both countries they have a very good chance of exiting the programme successfully and returning to durable market funding,”

Sounding a cautionary note, Mr Rehn added: “It is still premature to see if there is a need for any precautionary arrangement.  I would not rule it out, but, as I said, both have a very good chance in succeeding even without a precautionary arrangement,”

The Irish Government has not ruled out seeking a €10 billion credit buffer from Brussels as a safeguard against unexpected market shocks when it eventually leaves the bailout agreement.

However, speaking this weekend Michael Noonan, Ireland’s finance minister, signalled that Dublin may not apply for precautionary credit.

“IMF countries that exited bailout programmes in the past had a kind of precautionary programme attached,” he said. “But we have a very significant backstop because the NTMA (national debt agency) is carrying cash buffers of about €25bn,”

With Ireland and Spain appearing to have weathered their respective storms, there is now hope that the eurozone debt problems may nearing an end.