THE INTERNATIONAL Monetary Fund (IMF) has no reason to conclude that Ireland’s fiscal position has deteriorated relative to the assumptions included in the programme agreed with the IMF, the European Commission and the ECB last November, according to a source familiar with the talks.
The Government and the troika of international bodies funding the €85 billion rescue package for Ireland will publish a revised Memorandum of Understanding on Friday that will reflect the Government’s job initiative programme as well as a slower rate of recovery than anticipated.
Minister for Finance Michael Noonan and Minister for Public Expenditure and Reform Brendan Howlin yesterday met senior officials from the joint EU-IMF mission at the Department of Finance.
The meeting focused on discussing a draft of the revised memo, prepared by troika officials following a week of research and discussions. The joint mission will also be giving its assessment of how Ireland has performed since entering the programme in early December.
Ajai Chopra, the European deputy director of the IMF, ECB chief economist Klaus Masuch and Istvan Szekely, a senior official with the European Commission, all attended the meeting as did senior Government officials.
It came as a fiscal monitoring report published by the IMF projected that Ireland would not reach its target of reducing the State’s debt to 3 per cent of national income by 2015.
The report, which focused on over 50 developed and developing countries, concluded that the target would not be reached by 2016 either, at which point it stated the deficit would stand at 3.8 per cent. It said that Ireland, the US and Japan would be the only three countries surveyed which had a budget deficit above 10 per cent in 2011.
It is understood that the figures in the fiscal monitoring paper were estimated before the mission which is getting a more up to date picture.
According to a reliable source there is no reason to conclude that Ireland’s fiscal position has deteriorated relative to the understandings in the programme.
The memorandum will also include a provision to include the Government’s job initiative which it has promised to publish within 100 days of taking office.
A source familiar with the ongoing discussions with the EU-IMF mission said that the memorandum would give “sufficient latitude” for the Government to draw up the employment initiative but would make no reference to specific measures.
Taoiseach Enda Kenny told the Dáil that it was a jobs initiative and not a jobs budget. The adjustments would be made from the internal votes of individual departments, he said.
“The IMF made it clear to both parties in Government, when it met with them before Christmas, that it would be entirely in order to transpose sections or sectors of the IMF-EU programme . . . This jobs initiative was well flagged before the general election. It is part of the programme for government to stimulate the indigenous economy and give a sense of confidence,” said Mr Kenny.
Mr Kenny said the jobs initiative would be exchequer neutral.
A Government spokesman said that there could be financial measures in the initiative but the key point was there was no increase in spending.
