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Monday 24 July 2017

EU agrees to €7.5bn for Ireland, but no deal for Greece

Thomas Molloy

Thomas Molloy

THE European Union has given the go-ahead for €7.5bn worth of Irish financial aid to be paid over the next two months.

The decision came as mounting problems with Greek authorities led EU and IMF officials to leave Greece without a deal.

Yesterday's confirmation that Ireland will get the next loan instalment had been expected since officials from the European Commission, ECB and IMF visited Dublin in July and gave the thumbs-up to the Government's efforts to adhere to the austerity package agreed in November.

The commission added yesterday that Portugal, which is also dependent on bailouts, was set to get €11.5bn.

The good news for Ireland and Portugal came as talks between Greece and its international lenders on new aid were put on hold after disagreements over why Athens has failed to reduce its budget deficit and what it must do to catch up.

Austerity

International lenders put Greece on notice that it is in danger of losing its next €8bn tranche of bailout loans without taking action to catch up with its austerity programme and plug a new black hole in this year's budget.

Inspectors from the EU, IMF and ECB left Greece early yesterday, highlighting tensions between Athens and its lenders over how to implement reforms and pull the country out of a severe debt crisis.

Greece blames a deeper-than-expected economic contraction for its failure to meet deficit targets, while its lenders point at delays in implementing reforms. Finance Minister Evangelos Venizelos said the talks would resume in a fortnight.

Relations between the Irish authorities and officials from the IMF, ECB and Commission have been much smoother.

The Council of the European Union said yesterday that the Government was "meeting important programme milestones and demonstrating their commitment to addressing underlying weaknesses in public finances and the financial sector and as regards competitiveness".

The EU's €5.5bn worth of financial assistance to Ireland will be disbursed in two instalments, one of €2.5bn by the end of the month and the other of up to €3bn next month. A further €1.5bn and €500m are now set to be disbursed by the IMF and the British government respectively.

Finance Minister Michael Noonan told a Dail committee on Wednesday that Ireland was unlikely to need a new fund once the €85bn bailout had been spent.

Mr Noonan said the country could return to market well before the bailout funding runs out at the end of 2013. "Things going well, we will be putting our toe in the market far ahead of that (back end of 2013)."

Irish Independent

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