Business Irish

Tuesday 23 May 2017

Chopra to commend efforts in reaching IMF targets as Howlin sets out stall

BAILOUT OVERSIGHT

The IMF's Ajai Chopra passes a student protest by 'The Enough
Campaign' opposing the EU/IMF quarterly review visit to the
Department of Finance yesterday. Photo: Steve Humphreys
The IMF's Ajai Chopra passes a student protest by 'The Enough Campaign' opposing the EU/IMF quarterly review visit to the Department of Finance yesterday. Photo: Steve Humphreys

Emmet Oliver and Tom Molloy

The IMF executive who designed Ireland's bailout programme, Ajai Chopra, has been in Ireland since Monday putting the finishing touches to third review of the State's €85bn rescue plan.

Ireland's progress will be complimented by the Washington-based body at a press conference tomorrow, with the State reaching most of the IMF/EU targets ahead of time.

Talks mainly centre around banking issues and there remain sticking points about how the banks are going to deleverage and reduce their loan books, particularly with the assistance of NAMA.

The IMF/EU/ECB troika want the banks to sell off loans or move them into NAMA, allowing the banks to reduce their loan-to-deposit ratios. But the current talks are looking at how this can be done, particularly when deposits, while stabilising, are not growing

Chopra was leading a large IMF delegation yesterday and while he is expected to talk extensively on Thursday about the lack of a European response to the debt crisis, he will praise Ireland's efforts in making cuts and raising taxes.

The IMF programme does, however, commit Ireland to tackle the sheltered professions in an attempt to bring down prices.

But the State has implemented a range of reforms requested by the IMF/EU, including last week appointing a fiscal council.

Meanwhile, the State will have to shell out a staggering €116bn to pay for the pensions of all existing civil servants, Public Expenditure and Reform Minister Brendan Howlin TD told the new Dail Select Committee that scrutinises spending in this area.

The figure, which is more than twice what the Government spends in a year, is not included in the calculations for the national debt, Mr Howlin admitted.

Mr Howlin, who was appearing for the first time since his new department was officially created last week, also said the State will spend around €2.7bn on civil service pensions this year.

He claimed the growth of day-to-day public expenditure had been brought under control, predicting that it would contract by 2.7pc this year. Despite this, the size of the public sector will only decline by 2,000 this year after shrinking by 5,000 last year and 10,000 in 2009.

Mr Howlin told deputies that his department has three priorities: helping the Government achieve fiscal targets, public service reform and political reform. Despite the department's emphasis on saving money, seven areas of spending for 2011 rose.

Irish Independent

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