EU to praise Ireland for progress on bailout programme
Published 09/09/2011 | 05:00
IRELAND is expected to be praised today for progress on its bailout programme by the EU, but attempts to burn bank bondholders have been shot down. The European Commission will today publish the report of its second review mission, which will say that the programme is "on track on all fronts". Ireland has become something of a poster child for EU-IMF rescues, with bond yields and spreads falling as investors regain confidence in the country's ability to recover.
But there are still questions over the fate of special wage agreements in the retail, catering and construction sector, which the European Commission says must be overhauled.
EU sources have also poured cold water on a potential mortgage relief fund, although the Government has not approached its bailout partners with any proposals.
"Everyone is responsible for his own choices and decisions," said the source, who added that any measures introduced by the Government would have to be budget neutral and discussed with its bailout partners.
The Central Bank said last month that 7.2pc of mortgages were at least 90 days overdue.
A stress test carried out on the country's six lenders earlier this year estimated that banks could incur losses on residential mortgages of between €9.6bn to €16.9bn.
The EU says that banks have enough capital to withstand these losses.
On taxes, the source said the EU "fully respects the Irish Government's view that it is not turning itself into a high tax country" but that if it intended to freeze income tax it would have to compensate by slashing spending further to hit targets.