EU,IMF Officials in Ireland for Bailout Review

Senior officials from the European Union (EU), European Central Bank (ECB) and the International Monetary Fund (IMF) arrived in Dublin on Wednesday to carry out their third review of Ireland’s 85-billion-euro bailout package.

The quarterly review of the Irish government’s progress of the package is scheduled to conclude on July 14.

The review is necessary for Ireland to receive the next tranche of bailout loans from the so-called troika of EU, ECB and the IMF.

Earlier reports from RTE, Ireland’s public broadcaster, said conditions requested by the troika during their last review have almost all been met.

These include a primary deficit target, restructuring Ireland’s banks, and giving extra power to the country’s Central Bank.

The troika team is expected to start talks during this week’s visit on the next review in September which is likely to focus on possible cost-cutting measures in Ireland’s 2012 budget.

As required as part of the bailout deal, Ireland must cut 3.6 billion euros in the next budget. Ireland had agreed with the troika that 1.5 billion euros would be raised through increased taxes while the rest 2.1 billion euros would be saved through cutting government expenditure.

But according to Ireland’s Finance Minister Michael Noonan, Ireland might have to slash even more in the next budget, bringing the figure closer to 4 billion euros.

Speaking to Ireland’s parliament on Tuesday, Noonan said that the method in which the savings are made may not necessarily be in line with what had been agreed with the troika and that renegotiation is possible.

“On the review due to take place next week, we have not signaled any major items for renegotiation. However, during the quarter in the run-up to the budget, there will be items for renegotiation, because the manner in which we will make the correction in the budget may not accord with what is in the memorandum of understanding,” he said.

“As long as our approach is fiscally neutral, we will be in a position to substitute one measure for another,” he added.


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