Tags: ireland | imf | loan | crisis | europe | euro

IMF Reaches Staff-Level Agreement for Irish Loan

Sunday, 28 Nov 2010 10:19 AM

 

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The International Monetary Fund said it reached a staff-level agreement to contribute about 22.5 billion euros ($29.9 billion) to an international bailout plan for Ireland.

The IMF has activated its “fast-track procedures” for the board to consider the three-year loan, which is part of an 85 billion-euro package with the European Union and European bilateral lenders, Managing Director Dominique Strauss-Kahn said in an e-mailed statement. He said he expects the fund’s board to approve the request in December.

“The Irish authorities have today proposed a clear and realistic package of policies to restore Ireland’s banking system to health and put its public finances on a sound footing,” Strauss-Kahn said. “In recent years, Ireland has resolutely carried out bold policies in a very challenging environment, and I have confidence in its ability to implement this new program.”

Ireland became the second euro country to seek a rescue after the Greek debt crisis earlier this year destabilized the currency and forced the EU to set up a 750 billion-euro rescue fund backed by the IMF

The type of loan that was agreed on, the so-called Extended Fund Facility, allows Ireland to start paying back later than in standard IMF funding. Repayments would start after 4 ½ years and end after 10 years, the institution said.   At today’s rate, the interest rate charged to Ireland by the IMF would be an average 3.12 percent for the first three years “at the peak level of access,” the Washington-based lender said in an e-mail. It would be “just under 4 percent” after three years.

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