Brussels, 29 November 2010
Joint statement of European Commissioner for Economic and Monetary Affairs Olli Rehn and Managing Director of the International Monetary Fund Dominique Strauss-Kahn on Ireland
"We strongly support the economic program announced today by Ireland. It is a forceful response to vulnerabilities in the banking system imposing a heavy cost on the budget and, in turn, hurting the prospects for growth that Ireland needs for an enduring solution to the crisis.
This program articulates a clear strategy for tackling today's problems and for harnessing the enormous growth potential of this open and dynamic economy. Swift and sustained implementation of this program will create a smaller banking sector that is robust and well capitalized, and able to serve the needs of Ireland's economy.
It also offers a road map for sound public finances by setting strong, upfront actions in a multi-year framework.
On the financial side, the program shows the authorities' determination to reorganize the banking sector while deleveraging the banks and injecting fresh capital into them. The program will also strengthen regulation and supervision to prevent a repeat of the costly mistakes of the past.
On the fiscal side, the program spells out both spending and revenue efforts over several years to repair the budget position, with due regard for Ireland's system of strong social protection.
Carrying out this plan calls a sustained effort by the Government and the people of Ireland. But it also offers a sound basis for stable, job-creating growth.
Ireland’s international partners will support this effort. The European Commission and the bilateral lenders, together with the international community through the IMF, will offer financing that will be complemented by the Irish authorities so as to amount to €85 billion.
By shielding Ireland from the need to go to the markets for a considerable period of time, this support places financing at Ireland's disposal on more favourable terms than it could obtain elsewhere for the foreseeable future. This package also offers assurance that Ireland's banking system will be adequately funded, including through the buffer of €17.5 billion from the nation's cash reserves and other liquid assets."