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Dublin: 19 °C Tuesday 30 September, 2014

IMF open to extending repayment date on Ireland’s €19bn bailout loans

Christine Lagarde says the IMF has an “open mind” about allowing Ireland to defer its repayments if it helps end the bailout.

IMF managing director Christine Lagarde signs the guest book in the Taoiseach's Office.
IMF managing director Christine Lagarde signs the guest book in the Taoiseach's Office.
Image: Peter Morrison/AP

THE HEAD of the IMF has said the fund has an “open mind” about the possibility of delaying the repayment of Ireland’s IMF bailout loans.

Speaking in Dublin, Christine Lagarde said the IMF was willing to work with the European Commission and the European Central Bank as they examined how best Ireland’s loans could be made more manageable through extending the repayment period.

Lagarde said all matters on making the loans more affordable – including an extension of the maturities on the €19 billion Ireland has borrowed from the IMF – would be considered with the “imperative of helping Ireland to exit successfully” from its funding programme later this year.

There was no question of extending the 2015 deadline for bringing the Irish budget deficit within European limits, however, with Lagarde saying the 2015 deadline had been “realistic” and Ireland’s progress to date affirmed as much.

Finance minister Michael Noonan said the next quarterly visit of the Troika inspectors, due next month, would see the EU-IMF lenders come up with a ‘menu’ of different ways in which the budget extension

The IMF wanted to see a “comprehensive approach” taken to the remainder of Ireland’s bailout, and to the question of how Ireland would be able to ease its way out of the bailout programme later this year.

Ireland – and households – need ‘predictability’

Key to this, Lagarde said, was that the exit was planned to ensure “predictability” about Ireland’s future financial affairs.

A similar tactic was needed to deal with the problem of mortgage arrears, she said, as uncertainty about a family’s financial future would cause them to worry, not to save and not to invest. Similarly, small businesses who were unsure of their future could not hire staff.

Lagarde said she wished to offer congratulations for the “success of the efforts taken by the government and the people of Ireland”.

Ireland had made “extraordinary efforts” to rebuild its economy, she said, remarking that roughly “two-thirds” of the required fiscal reform efforts had been achieved.

Ireland was one of the few countries in the Eurozone to show signs of economic growth, and the figures showing an increase in the numbers at work in 2012 indicated there was “clearly good news on the horizon”.

Marking International Women’s Day, Lagarde expressed her support for gender quotas as a measure of increasing female participation in public life.

“I do think quotas are helpful, [though] not forever,” she said, arguing that people would naturally choose to elect more women when they saw that women could “bring to the table”.

Read: Enda Kenny meets IMF chief Christine Lagarde in Dublin

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