Another green card for Ireland. There Troika, i.e. the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF), ha approved for the seventh time i progress of the Irish economy. In fact, despite the crisis in the euro area, Dublin has kept its promises and is implementing the reforms properly. In concrete terms, this approval translates into the green light of 2,6 billion for Ireland: 900 million from the Monetary Fund, 1 billion from the two state-saving funds ESM and EFSF and 700 million from the other EU members through bilateral loans.
- Fiscal targets for the first half of 2012 have been achieved: the deficit is on track to reach 8,6% of GDP at the end of this year. However, the fiscal deficit remains the largest in the eurozone and the Troika has insisted that the authorities continue to keep public finances under control, especially as regards health expenditure.
MACRO SITUATION – For 2012 and 2013, growth prospects remain modest and still in recession: today the data on GDP for the first quarter of 2012 was released, which recorded the third consecutive drop with -1,1%. Unemployment is "unacceptably high" and household debt is still too high. However, the recent decline in Irish sovereign bond interest rates underscores growing confidence in Ireland's strong ability to implement adjustment policies.
Despite the weakness of the external context and the high unemployment rate, incomes are slowly increasing and with them domestic demand. Thanks to results of the referendum by the end of May, the Stability Pact will soon be ratified and, according to the Troika, Ireland's fiscal framework will emerge strengthened. In the financial sector, the Irish authorities continue to propose reforms to restore the health of the financial sector. Under the supervision of the Authorities, the banks are moving towards an improvement in the quality of their assets, but "further efforts are needed".
The next Troika mission is scheduled for October. The EU and IMF aid program provides for a total loan of 85 billion euros.
