14 November 2013

Eurogroup statement on Ireland: Programme exit without financial assistance fully supported

"We congratulate the Irish authorities for the successful implementation of the programme. The very good work done thus far in terms of fiscal consolidation and structural reforms are allowing Ireland to return to a path of sustainable growth and job creation, as evidenced by the nascent economic recovery, declining, although still high, unemployment and improving business confidence.

We fully support the Irish government's decision to exit the programme without requesting any successor financial assistance. After an impressive turnaround, favourable financing terms demon the regained trust of investors in the Irish sovereign. On the back of decisive financial sector repair, the overall health of the Irish banking sector has also significantly improved and Irish banks have enjoyed better funding conditions and improved market access.

We also concurred with the Irish authorities that the Treasury cash buffer of more than €20 billion, covering more than the sovereign’s gross funding need in 2014, represents a significant backstop against internal or external risks. In addition the Eurogroup and ECOFIN ministers' decision in April to extend loan maturities has further contributed to supporting market sentiment and lowering the borrowing needs in the future, thus enhancing Ireland's debt sustainability.

Furthermore, we welcome the reaffirmed commitment by the Irish authorities to pursue reform efforts beyond the programme period to address remaining challenges, in particular ensuring a timely correction of the excessive fiscal deficit, completing the restructuring of the banking sector and boosting the country's growth potential through a strong structural reform agenda. The authorities’ exemplary track record under the programme underlines their resolve to deliver in these endeavours.

The EFSM is expected to make a last disbursement of €0.8 billion in January once the final review is formally completed in early December. The IMF is also expected to disburse a final €0.6 billion subject to the approval of the review by its Executive Board.

Ireland is a living example that EU-IMF adjustment programmes are successful provided there is a strong ownership and genuine commitment to reforms. We commend the Irish people for their efforts and achievements under difficult circumstances. The success of the Irish financial assistance programme also clearly illustrates our resolve to work together to ensure the cohesion and stability of the euro area."

Statement

Economic Adjustment Programme for Ireland

Statement by Vice-President Rehn on Ireland's decision regarding programme exit

This morning, Michael Noonan informed me of the Irish Government's decision to exit the EU/IMF programme in December as planned and without a pre-arranged precautionary credit facility.

I know the Irish Government has reflected very carefully on this matter. The European Commission has always made very clear that this was a decision for Ireland to take and that we would support Ireland, whichever decision was taken.

While challenges remain, Ireland has made impressive progress and is well placed to make a successful and durable programme exit. Graduation from the programme will send a very clear signal to markets and international lenders that the adjustment effort undertaken in Ireland, with the support of its European and international partners, has paid off.

Ireland has accumulated significant cash reserves under the programme, which has been helped by the decision taken this year by European creditors to extend the maturities on loans granted to Ireland. This, and earlier decisions on maturities and interest rates, have made a major contribution to further enhancing prospects for a durable return to the markets. Determined implementation of a comprehensive reform agenda, combined with European support, has led to a decisive improvement in a country's economic fortunes and put it back on a path of sustainable growth and rising employment.

In short, today is a good day for Ireland and the Irish people.

Full statement

Further remarks

Eurogroup/Dijsselbloem

I would like to congratulate both countries at this important moment for the euro area. Both countries have always shown strong commitment towards the implementation of their programmes. This has shown results, as the recent developments on the financial markets have shown. The Irish and Spanish people have gone through a difficult period but I am now confident that their efforts will pay off in the coming years. Now these economies are back on the road to recovery.

On Ireland, a statement has been distributed to you. Let me just highlight the main points: starting by saying that we fully support Ireland's decision to request a clean exit from the programme. The programme implementation has been successful, as evidenced by the return of market confidence, the ongoing economic recovery and declining unemployment.

We have full confidence in the ability of the Irish government to maintain the reform momentum in order to address the remaining challenges in the fiscal, banking and structural areas. The final review will unlock a last disbursement of €800 million.

Full statement

© European Council