IMF 'on call' to help Ireland
Taoiseach Enda Kenny welcomes International Monetary Fund managing director Christine Lagarde to his office in Dublin this morning at the start of her visit to Ireland. Photograph: David Sleator/The Irish Times
International Monetary Fund managing director Christine Lagarde has said there is “clearly good news on the horizon” for Ireland.
Speaking at a press conference in Government Buildings with Tánaiste and Minister for Foreign Affairs Eamon Gilmore and Minister for Finance Michael Noonan, Ms Lagarde said Ireland was one of the few countries in the euro zone showing positive growth numbers.
“There are results around the corner. While it has been very hard there is clearly good news on the horizon,” she said.
Ms Lagarde said the IMF had been on the side of Ireland “through the toughest times” and would “stay available and on call”.
She said the imperative was helping Ireland exit its bailout programme successfully.
"We have an open mind about many issues, many of the terms and conditions, if you will, of the exit strategy," Ms Lagarde said. "We will look at all the options available."
She said those options would have to be within the IMF's mandate and that its rules prevented it from extending the terms of Ireland's bailout loans, a concession that is currently being discussed at European level.
However, she reiterated that Europe should do all it can to assist the return of Ireland and fellow bailed out country Portugal to financial markets, not limiting its help to just extending loans under their EU-IMF bailouts.
Later, Ms Lagarde said Ireland needs to focus on include fixing the country's banks, the former French finance minister said, adding that while a huge amount of work had been done, more was required to ensure the sector is put on a solid footing.
She also warned that Ireland's still-high unemployment rate of 14.2 per cent risked fraying the social fabric in a country where social upheaval has been limited.
"In too many places across Ireland, people are becoming increasingly demoralized, disengaged and disenchanted," Mr Lagarde said in a speech at Dublin Castle. "There is a real risk of a fraying of social fabric, a breakdown of communities, of people losing faith in the system so we need renewed efforts to help these people find jobs."
She also said the European Central Bank has room to cut interest rates as the euro-area economy remains mired in recession. "Monetary policy should remain accommodative," she said in a speech. "We believe that there is still some limited room for the ECB to cut rates further."
Ms Lagarde said she expects the region's economy to remain in recession this year. The ECB forecast yesterday that the 17-nation economy will contract 0.5 per cent in 2013 instead of the 0.3 per cent projected three months ago.
On International Women’s Day, Ms Lagarde said Irish women were doing better than some of their colleague in the euro zone but she still had concerns about lower salaries and low participation. She said she would encourage Mr Gilmore and Mr Noonan to make sure women were included and respected. Turning to Mr Noonan, she said: “I know that this gentleman respects the views of women.”