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Ireland exits bailout program but difficulties remain; Portugal next in the queue

Tuesday, December 17th 2013 - 02:53 UTC
Full article 3 comments
“Ireland will again stand as a full member of the Euro zone” said PM Kenny “Ireland will again stand as a full member of the Euro zone” said PM Kenny

Ireland's prime minister has marked the end of the country's bailout program with a speech to the nation. In a televised address, Enda Kenny said Ireland's “good name and our credibility” had been restored. Meanwhile Portugal could be the next in the list after a review of the economy was advanced six months.

 PM Kenny warned that difficult economic decisions remained, with a new medium-term economic plan due to be set out this week. But he promised that never again would “Ireland's stability be threatened by speculation and greed”.

Ireland is the first Euro-zone nation to complete the lending deal put in place by a group of international lenders, known as the troika. The country was rescued with a three-year 85bn Euro package when borrowing on the financial markets became too expensive and Ireland faced bankruptcy.

From Monday, Ireland regains its financial independence and is once again able to raise money on the capital markets in the same way as other countries.

The Taoiseach said: “Ireland will again stand as a full member of the Euro zone, with the same rules, obligations, supports and opportunities as all other member states.”

The troika - the European Union, International Monetary Fund, and European Central Bank, had held significant control over policymaking and the direction of the Irish economy.

The troika insisted on tax rises, structural reforms and the sale of state assets in exchange for the bailout, and reviewed Ireland's progress every three months.

The country's economic destiny was now back in its own hands, the prime minister said. “This is an important step but it is not an end in itself. Our lives won't change overnight.

”But it does send out a powerful signal internationally, that Ireland is fighting back, that the spirit of our people is as strong as ever.“

The Irish economy is emerging from one of the deepest recessions in the Euro-zone, and is forecast to grow by about 2% next year. Unemployment has fallen below 13%, from a 15.1% peak in 2012.

But, said Mr Kenny, ”we must continue to pursue prudent budgetary policies. That's what convinces those who create jobs that Ireland is a place in which they can invest with confidence.

“Everyone knows that you can't keep spending more than you are earning. As of today, we have already completed over 90% of the necessary cuts and tax increases.

”As a result, we can now begin to reduce the national debt burden.“

Job-creation would be at the heart of this week's economic plan, he said. ”Three years ago, 1,600 jobs were being lost in this country every week. Now - every week - over 1,000 extra new jobs are being created. That's progress, but we must build on it.

“We will remove the barriers to new jobs in key sectors, and reform the welfare system to provide supports and incentives for unemployed people to take up new jobs,” he said.

The economies of Greece, Portugal and Cyprus continue to be supported by the bailout process. However Portugal moved a step closer to exiting its bailout program after the international lenders that saved the country approved a review of the economy six months early.

The EU and IMF have been monitoring the country's economic reforms, a condition of the 78bn Euro bailout of 2011. Portugal hopes to leave the bailout agreement in the middle of next year.

The troika, EU, IMF and European Central Bank, have carried out ten reviews of the economy to ensure that budget cuts and economic restructuring are implemented.

“The lenders agreed that our targets were met and our objectives are within reach,” said the country's finance minister Maria Luis Albuquerque. “It was a very smooth evaluation... that envisages the end of the bailout program on the agreed date” in mid-2014, she said.

Categories: Economy, Politics, International.

Top Comments

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  • redp0ll

    Well done Enda! No squawking about it being someone else's fault. You have buckled to and now Ireland is a nation once again
    Erin go Bragh!

    Dec 17th, 2013 - 04:31 pm 0
  • ChrisR

    Does this mean that the UK has got the money back we loaned them when no-one else would?

    I suspect not - yet.

    Dec 19th, 2013 - 03:28 pm 0
  • Pete Bog

    How much money/help did Ireland get from the Argies when they claimed Ireland supported the mythical Malvinas?

    Dec 21st, 2013 - 10:18 pm 0
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