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Ireland’s bailout plan off to strong start, says IMF

The IMF has said Ireland's bailout programme is "off to a strong start'' with the new government hitting all the targets set for them so far.

The Washington-based organisation last night gave a boost to Ireland's recovery saying the country is rapidly gaining "credibility'' in the markets.

The board of the organisation yesterday considered Ireland's first few months in the programme and a statement last night was very upbeat.

"Ireland's economic programme is off to a strong start,'' said the organisation. It added the bank stress tests were a major step forward for the economy here.

"These announcements are a major step towards restoring the Irish banking system to health which is crucial for economic recovery,'' said the statement. The IMF is giving Ireland ¿21.8bn under a deal agreed last December, with the rest from the EU and the government itself.

"Ireland is making progress in overcoming the worst economic crisis in recent history,'' it said.

Naoyuki Shinohara, deputy managing director of the IMF, was emphatic that Ireland was moving in the right direction.

"Resolute policy implementation by the authorities has kept the programme on track during a period of political change and an unsettled external environment,'' he declared.

"The new government has taken full ownership of the goals and key elements of the European Union/IMF supported programme; after only a few weeks in office, it announced comprehensive reforms and recapitalisation of the domestic banks,'' he added.

The organisation was rocked this week by allegations of attempted rape against its director Dominic Strauss Kahn, but its influence in the markets remains high despite this huge setback.

The IMF said it was not key the banks sold off non-core assets. "Deleveraging of domestic banks is needed to help them regain market-based funding,'' said Mr Shinohara.

He said support from the ECB for the banks would also be a major bonus.

"To strengthen their balance sheets, banks should also work out problem loans on the basis of best international practices,'' he said.

"The budget is on track for the ambitious 2011 fiscal adjustment targets,'' he said.

The organsiation even gave the thumbs-up to the government's recent jobs package, pointing out that it was neutral in terms of the budget, but does support job creation.

"Although the external environment continues to be challenging, the authorities are committed to sustained strong program implementation,'' Mr Shinohara added.