WASHINGTON – The International Monetary Fund on Monday extended a fresh 3.2 billion euros (US$4.3 billion) to Ireland as part of its EU-partnered rescue, citing the country's reform efforts.
"The Irish authorities continue to advance wide-ranging reforms to restore the health of the financial system so it can support Ireland's recovery," the IMF said in a statement.
The IMF executive board approved the disbursement after a review of Ireland's economic program supported by a three-year IMF loan of 22.6 billion euros, of which about 16.1 billion euros has been provided, including Monday's tranche.
Ireland was forced to take an 85 billion euro rescue from the IMF and the European Union in late 2010 when massive debts left it on the brink of collapse.
The IMF hailed Monday a series of reforms and the government's success in reducing the deficit despite weaker domestic demand, "reflecting the authorities' strong revenue administration and firm expenditure control."
"Major progress in downsizing the banking system has been made, with the two largest banks disposing of almost 15 billion euros in mainly foreign assets in 2011 at better prices than anticipated," the IMF said.
The Fund also highlighted a plan for personal insolvency reform that includes an out-of-court debt settlement mechanism that would cover mortgages and other secured debts.
"To support a renewal of sound lending and domestic demand recovery, financial sector reforms must continue to rebuild long-term viability of the banks and improve the quality of their balance sheets," said David Lipton, the IMF's first deputy managing director. AFP