Lenders should set aside post-bailout funds for Ireland, says IMF official

Reuters

BERLIN (Reuters) - Ireland's lenders should set some money aside for when the country exits its bailout, which it should do step by step, a senior International Monetary Fund official said on Saturday.

Ireland is scheduled to quit its 85 billion-euro rescue programme next month, becoming the first euro zone country to do so.

"Ireland has done everything it can to stabilise its economy again but the economy remains weak," David Lipton, first deputy managing director of the IMF, said in an interview with Germany's Die Welt newspaper.

Given this, the 'Troika' of lenders from the IMF, European Commission and European Central Bank should support Ireland with "precautionary measures" to cement its transition back to financial independence.

"We want a package which makes money available in case of emergency - even if we do not expect there to be an emergency," Lipton was quoted as saying.

Irish Finance Minister Michael Noonan said in October the country may dispense with the insurance policy of a precautionary credit line when its aid programme ends on December 15, but that no final decision had been made.

Ireland sought outside financial help in late 2010 as the consequences of a rescue of its banks hurt in the financial crisis drove it close to bankruptcy.

Following years of fiscal austerity to meet the conditions of the bailout, the economy is expected to grow slightly this year and expand at a faster clip in 2014. But yet more spending cuts are on the agenda for next year and unemployment remains high.

Lipton also said it was up to the Irish government to decide if it needed a second aid programme.

(Reporting by Michelle Martin; Editing by John Stonestreet)

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