herald

Wednesday 25 April 2018

Ireland praised for 'confident' exit of bailout

IMF chief Christine Lagarde. Photo: AP/Jacques Brinon
IMF chief Christine Lagarde. Photo: AP/Jacques Brinon

ECONOMISTS and international investors have hailed Ireland's "confident" decision to exit the bailout without back-up funding.

The move has received broad global support from both political and economic arenas.

Olli Rehn said that the announcement Ireland would not require a backstop marked "a good day" for the country.

The European Commission vice-president said Finance Minister Michael Noonan informed him of the decision to exit the EU/IMF the programme as planned next month and without a pre-arranged precautionary credit facility.

"Graduation from the programme will send a very clear signal to markets and international lenders that the adjustment effort undertaken in Ireland, with the support of its European and international partners, has paid off," he said.

"In short, today is a good day for Ireland and the Irish people.

"It provides clear evidence that determined implementation of a comprehensive reform agenda can decisively turn around a country's economic fortunes and put it back on a path of sustainable growth and rising employment," he added.

International Monetary Fund managing director Christine Lagarde said that Ireland now has a bright economic future.

"The Irish authorities have established a very strong track record of policy implementation. This bodes well as Ireland exits its EU/IMF-supported programme," she said.

"Although uncertainties remain in Europe and the global economy more broadly, Ireland is in a strong position in terms of its bond yields and has built a sizable cash buffer.

"We look forward to continuing to work with the authorities as they address the challenges that remain."

Goodbody economist Juliet Tennent said it would ultimately give Ireland a ratings boost.

"Ireland's decision to exit alone shows confidence in its ability to fund itself and may well be viewed favourably by the ratings agencies, particularly Moody's," she said.

Ireland's decision was welcomed by Christian Schulz, senior economist at Berenberg, who said Ireland could afford to "go it alone".

"With Irish 10-year borrowing costs at a mere 3.5pc, even the huge debt pile of 125pc of gross domestic product the country has amassed since 2008 can be sustained on reasonable growth and inflation assumptions and with further progress on the fiscal side,'' he said.

 

PSYCHOLOGICAL

Covering the story, the New York Times noted: "Ireland is seen as the best performing of the four bailed-out economies, and its return to economic normalcy is an important psychological moment for Europe's single currency zone, which is slowly emerging from its near-death experience."

DAN WHITE: PAGE 16

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