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IMF calls on EU to provide better support for Ireland's economic recovery
A more comprehensive European approach to dealing with the region's debt crisis is needed to help Ireland regain access to debt markets, the International Monetary Fund (IMF) said on Friday May 20, 2011. The IMF went on to say that Europe needed to address the risk of financial stress in its periphery through a more "comprehensive" plan.
Speaking at a news conference in Washington Ajai Chopra, IMF mission chief to Ireland said: "For policy matters that are under their control, the Irish authorities have been decisive and are doing all they can to get ahead of their problems".
However he went on to say: "But we do need to recognise that they may not be sufficient...This is why we have put emphasis on support from a more comprehensive and consistent European plan."
The IMF said greater confidence around the availability of European Central Bank medium-term funding for Irish banks, at the root of the country's economic woes, would help the lenders return to debt markets.
The IMF also said the ouitlook for Ireland's debt remained fragile. It noted some risks had risen due to weaker economic growth, higher unemployment, rating agency downgrades and problems in Europe's periphery.
It also noted that higher market interest rates and weaker prospects for growth in the medium-term are risks to Ireland's debt outlook but the IMF said accelerating Dublin's fiscal austerity programme would not mitigate such risks and would further retard growth.