From the Irish Government
The Government today agreed to request financial support from the
European Union and the Euro Area Members States. The IMF will also be
requested to assist in the provision of support.
The Government
welcomes the agreement reached at the Eurogroup meeting today that
providing assistance to Ireland is warranted to safeguard financial
stability in the EU and in the Euro Area.
In the context of a
joint programme EU/IMF, the financial assistance package to the Irish
state should be financed from the European financial stabilisation
mechanism (EFSM) and the European financial stability facility (EFSF),
possibly supplemented by bilateral loans to be negotiated by EU Member
States.
EU and euro-area financial support will be provided under a
strong policy programme which will be negotiated with the Irish
authorities by the Commission and the IMF, in liaison with the ECB.
The
programme will address the budgetary challenges of the Irish economy in
a decisive manner on the basis of the ambitious budgetary adjustment
and comprehensive structural reforms that will be contained in the
Government’s Four Year Budgetary Strategy. Given the underlying
strengths of the Irish economy, decisive implementation of the programme
should allow a return to a robust and sustainable growth, safeguarding
the economic and social position of the people of Ireland.
A
central element of the programme will also be to support further deep
restructuring and the restoration of the long-term viability and
financial health of the Irish banking system. It will build on the
extensive measures taken by Ireland to strengthen its banking sector,
via guarantees, recapitalisation and asset segregation. These measures
have helped to maintain financial stability of the Irish banking sector
at a time the both the banking system and the Irish economy have
confronted significant challenges reflecting both domestic and
international factors.
The programme will address the potential
future capital needs of the banking sector. By building on the measures
already taken by Ireland to address stress in its banking sector, a
comprehensive range of measures – including deleveraging and
restructuring of the banking sector – will contribute to ensuring that
the banking system performs its role in the functioning of the economy.
Since
the last Eurogroup meeting on the 16th November there has been very
constructive and positive engagement and dialogue between the Irish
authorities and the Commission, the ECB and the IMF in order to
determine the best way to provide necessary support to address
continuing market risks, especially as regard the banking system, in the
context of the four-year budgetary plan and the upcoming budget.
And from Ecofin/Eurogroup:
Ministers welcome the request of the Irish Government for financial
assistance from the European Union and euro-area Member States.
Ministers concur with the Commission and the ECB that providing
assistance to Ireland is warranted to safeguard financial stability in
the EU and in the euro area.
In the context of a joint EU-IMF
programme, the financial assistance package to the Irish state should be
financed from the European financial stabilisation mechanism (EFSM) and
the European financial stability facility (EFSF), possibly supplemented
by bilateral loans to be negotiated by EU Member States. The United
Kingdom and Sweden have already indicated today that they stand ready to
consider a bilateral loan.
EU and euro-area financial support
will be provided under a strong policy programme which will be
negotiated with the Irish authorities by the Commission and the IMF, in
liaison with the ECB.
The programme will address the fiscal
challenges of the Irish economy in a decisive manner. It will build on
the fiscal adjustment and structural reforms that will be put forward by
the Irish authorities in their Four Year Budgetary Strategy next week.
This
strategy will provide the details of the Government’s commitment to
achieve fiscal consolidation of €6billion in 2011 as part of a strategy
leading to a 3 per cent of GDP deficit by 2014, implying an overall
consolidation of €15 billion in the four year strategy, which contains
an annual review. Given the strong fundamentals of the Irish economy,
decisive implementation of the programme should allow a return to a
robust and sustainable growth, safeguarding the economic and social
cohesion.
The programme will also include a fund for potential
future capital needs of the banking sector. By building on the measures
already taken by Ireland to address stress in its banking sector, a
comprehensive range of measures – including deleveraging and
restructuring of the banking sector will contribute to ensuring that the
banking system performs its role in the functioning of the economy.
After
approval by the Irish Government, the programme will be endorsed by the
ECOFIN Council and the Eurogroup, in line with national procedures, on
the basis of a Commission and ECB assessment.
