Ireland Meeting Bailout Targets, Says Troika

Officials from the IMF, European Union and European Central Bank say Ireland is meeting all its obligations under the terms of the bailout, but have warned that there are considerable challenges ahead for the country.

The three institutions - which have become known as "the troika" - spent ten days checking the books at Government Buildings in Dublin and professed themselves satisfied that all targets set out in the $86 billion rescue had been met.

"The program is on track but challenges remain and continued steadfast policy implementation will be key," the troika said in a statement.

The troika said it now expects the economy to grow by 0.5% this year, having grown by 1% in 2011.

That is well below the 1.3% growth rate expected by the government, and on which its tax revenue targets are based.

"Domestic demand remains subdued, unemployment high, and trading partner growth is slowing," the troika said.

The Minister for Finance Michael Noonan and the Minister for Public Expenditure Brendan Howlin said Ireland met all of its 70 targets, for 2012 by a "significant margin".

Mr Noonan said that significant progress has been made with the troika on the controversial issue of the more than thirty billion euro in promissory notes being used to fund the now nationalized Anglo Irish Bank and Irish Nationwide.

EU, ECB and IMF officials had agreed to seek a common policy by the end of February on reducing the cost involved.

"It has moved. I am not saying we are successful by any manner or means," Minister Noonan said at a press conference. "Rather than the proposition being an Irish Government proposal, it will move to being a proposal coming from senior people representing the troika."

But the ECB has once again ruled out forcing any losses on senior bondholders at Anglo Irish Bank.

It's a hot topic in Ireland right now, as this week the former Anglo Irish Bank, now known as the Irish Bank Resolution Corporation, will repay a €1.25bn unsecured unguaranteed bond.

Many Irish people, including respected commentators, believe it is unjust to pay bondholders who took risky gambles on Anglo, the full amount at a time when budget cuts and austerity measures are affecting schools and hospitals in Ireland.

This is especially seen as the case given that Anglo is a failed bank that is being wound down - people consider it wasted money.

But the European Central Bank insists that no European bank will be allowed to default on any of its debt, arguing it would damage confidence and could be "very costly".

The issue led to a testy and entertaining exchange between the official from the ECB, Klaus Masuch and broadcaster Vincent Browne at the press conference.

Mr Masuch also mentioned that he believed Irish people were very clued-in to the details of the economic crisis.

"I'm impressed by the depth of discussion in Ireland," he said, "My taxi driver from the airport was very, very informed, I must say. Very, very informed."