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October 1, 2010    

IMF: “Ireland’s situation different to Greece”

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by Kay Murchie
IMF: “Ireland’s situation different to Greece”

Dominique Strauss-Kahn, Managing Director of the International Monetary Fund (IMF), has today said he does not expect the European rescue fund to be activated for Ireland.

The rescue fund was established by European Governments and the IMF after the Greek debt crisis earlier this year.

In a newspaper interview, Mr Strauss-Kahn said: “We are ready in case we need to contribute…..we are not expecting it”.

He added: “The situation in Ireland is very different from that in Greece…The Irish Government has already put in place a series of solid fiscal and banking sector measures.”

Mr Strauss-Kahn’s comments come after the Irish Government promised a new four-year budget plan in November, in order to get the deficit below 3% of GDP by 2014 to keep within euro zone rules.

Bailing out the country’s banks has been a drain on the Irish economy but the Government has previously rejected claims that it could have difficulty raising funds and might have to turn to the EU rescue fund.

Ireland is now regarded as one of the weaker economies in the euro zone – it was one of the last in the region to emerge from recession.

The former “Celtic Tiger” economy experienced a property boom since the late 1990s, with multinationals arriving to take advantage of one of the lowest corporate tax rates in the euro zone.

Yesterday, the Irish Government said its three main banks are all likely to need extra capital in order to stay afloat.

A potential bailout could cost more than €50 billion, the Government said.

Mr Strauss-Kahn concluded: “The economic downtrend in Ireland is continuing but the Irish government has already taken a string of solid measures on the fiscal side.”

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