22nd November 2010

Embassy Press Release

Yesterday, 21 November 2010, the Government of Ireland announced that it has agreed to request financial support from the European Union and the Euro Area Member States. The IMF will also be requested to assist in the provision of support.

A meeting of the Eurogroup held on the same day decided that providing assistance to Ireland was warranted to safeguard financial stability in the EU and in the Euro Area.

Negotiations with the EU and IMF will determine the design, size and terms of the support facility provided and these negotiations will be conducted relatively quickly. The programme will address the budgetary challenges of the Irish economy in a decisive manner on the basis of the ambitious budgetary adjustment and comprehensive structural reforms that will be contained in the Government’s Four Year Budgetary Strategy.  

A central element of the programme will be to support further deep restructuring and the restoration of the long-term viability and financial health of the Irish banking system.  It will build on the extensive measures taken by Ireland to strengthen its banking sector, via guarantees, recapitalisation and asset segregation. These measures have helped to maintain financial stability of the Irish banking sector at a time when both the banking system and the Irish economy have confronted significant challenges reflecting both domestic and international factors.

The programme will also address the potential future capital needs of the banking sector. By building on the measures already taken by Ireland to address stress in its banking sector, a comprehensive range of measures – including deleveraging and restructuring of the banking sector - will contribute to ensuring that the banking system performs its role in the functioning of the economy.

Despite the difficulties in the banking sector and the necessary fiscal adjustments, Ireland’s economy is on the road to recovery. In 2010 exports will grow by more than 6% and total industrial production at the end of September was up 12% year on year. Given the underlying strengths of the Irish economy, decisive implementation of the programme is expected to allow a return to a robust and sustainable growth, safeguarding the economic and social position of the people of Ireland.

ENDS