IMF Chief Says Open to Changes for Irish Bailout Deal
The International Monetary Fund is open to changing the terms of Ireland’s bailout program to help the bailed-out eurozone nation return to long-term bond markets, IMF chief Christine Lagarde said here on Friday.
"We have an open mind about many issues, many of the terms and conditions of the exit strategy and as far as the adjustment to the loans," the managing director of the IMF told reporters at a press conference in the Irish capital.
Lagarde was speaking during her first visit to Dublin since it entered an 85-billion-euro ($112-billion) bailout program in November 2010, and her first visit to a rescued eurozone nation since taking over as head of the IMF in 2011.
Earlier this week, EU finance ministers requested the so-called troika of lenders -- comprising the European Union, the European Central Bank and the IMF -- consider extending maturities on the Irish and Portuguese bailout loans.
Such a move would reduce the immediate financial burden for these struggling economies to raise money on the open markets.
"It's not just about the extension of maturities, you can really think of other devices possible, but it certainly includes the extension," Lagarde said.
"We will look at it together with our two partners in the troika, and we have been tasked to do that and as I said with an open mind with the imperative to help Ireland exit the program.
"We are in a dialogue, we will continue in that dialogue so there is certainty as to the terms of the exit and the way forward," she added.
Lagarde also argued that there was scope for the European Central Bank (ECB) to cut its main eurozone lending rate below the current record-low of 0.75 percent. The ECB had held borrowing costs at this level for the eighth month in a row on Thursday.
"Monetary policy should remain accommodative, and we believe that there is still some limited room for the ECB to cut rates further," the IMF chief said.
Ireland meanwhile hopes to become the first bailed-out eurozone nation to exit its rescue program by returning fully to the sovereign markets in nine months.
Dublin was bailed out in late 2010 when the global financial crisis, a domestic property market meltdown and massive debts left it on the brink of collapse.
"The underlying problem (of the eurozone) is depressingly familiar -- lingering debts of households, banks, corporations and government," Lagarde added on Friday.
"As the different sectors struggle to shake off these millstones, growth is bond to suffer. And indeed, we expect a continued recession in the eurozone this year."