Draghi praises Ireland for crisis efforts

Improvements made ‘on all fronts’ with structural reforms and risk management, ECB president says

European Central Bank president Mario Draghi: “Structural reforms have been undertaken and financial stability risks have consistently, continuously and significantly been reduced in Ireland.” Photograph: Andrew Harrer/Bloomberg

European Central Bank president Mario Draghi: “Structural reforms have been undertaken and financial stability risks have consistently, continuously and significantly been reduced in Ireland.” Photograph: Andrew Harrer/Bloomberg

Mon, Oct 14, 2013, 01:00



European Central Bank president Mario Draghi praised Ireland’s efforts to repair its public finances and banking sector saying that the country has improved “on all fronts” since the financial crisis.

Mr Draghi declined to comment on whether Ireland would require a precautionary credit line, similar to an overdraft facility, when it exits the EU-IMF bailout programme at the end of the year.

“I don’t want to comment on this specific issue because it is just being discussed by the relevant authorities,” he told reporters at the annual meetings of the International Monetary Fund and World Bank in Washington.

Ireland had done “really well all throughout this dramatic period”, he said in response to a question from The Irish Times.

“It has improved on all fronts, all fronts, and it shows, it has shown in the higher rate of growth, higher than in most countries in the euro area last year,” he said at a press conference on Saturday.

Right things
“It is now slowing down a little but that’s, I think to me, the largest evidence that the right things have been done. Structural reforms have been undertaken and financial stability risks have consistently, continuously and significantly been reduced in Ireland.”

Ireland’s borrowing costs have fallen steadily and the Irish banks have dramatically reduced their reliance on cheap ECB funding over the past two years suggesting that the Government can fund itself without resorting to continued emergency external loans at the end of the bailout programme.

On Friday Europe’s Economic and Monetary Affairs Commissioner Olli Rehn said that it was “premature” to say whether Ireland would need a precautionary facility to exit the three-year programme.

Draft budget
Ahead of tomorrow’s budget, Mr Rehn’s spokesman told The Irish Times that the European Commission’s preliminary view of a draft budget was that it provided “a sound basis for taking forward the necessary fiscal consolidation in Ireland and paving the way for a successful programme exit”.

The progress made during Ireland’s programme could be seen in Washington by the fact the country did not figure in open discussions at the IMF- World Bank annual meetings. While speakers accepted that the financial crisis had dissipated in Europe, warnings were made about the return to growth.