IMF to maintain ‘intensive’ watch on State, says chief

On the eve of the Irish exit from the bailout programme, the International Monetary Fund’s head of mission for Ireland, Craig Beaumont, has said there is “still work to be done” to complete the country’s economic recovery.

The Washington-based fund was one of the troika of emergency lenders to Ireland.

Mr Beaumont defended the troika’s focus on austerity during the three-year bailout programme, saying that it was “unavoidable” given the depth of Ireland’s fiscal deficit.

The fund still believed private losses should have been shared with bondholders, a view the IMF held three years ago, he said.

“Public debt is now higher as a consequence and that is going to hang over Ireland for some time,” he said, adding that there was concern at the high debt levels even though they were “quite manageable”.

The IMF will maintain “intensified surveillance” on Ireland, Mr Beaumont said. The fund will retain an office in Dublin and carry out a second annual mission every year to monitor the Government’s performance, instead of just one IMF review under regular oversight of a country.

"The intensity will be reduced but we obviously have a very strong interest in seeing Ireland's economic performance continue to improve," he told The Irish Times.

'Work in progress'
He acknowledged that the recovery efforts remained "a work in progress".

“We agree entirely that there is still work to be done,” he said. “It is often the case when a fund-supported programme comes to an end, there is a set of issues that still needs to be addressed.”

Mortgage arrears had started to flatten out; the IMF has pushed for more resources to “engage with the unemployed” to tackle the high level of joblessness; and the Irish authorities have demonstrated a “very good track record” of hitting the fiscal targets.

The fund would be “very interested” in seeing how strong the Government’s medium- term economic strategy would be.

'Road map'
"My expectation is that it will set out a road map that people can monitor over time and see progress being made. The Government has built a reputation for its economic management and it surely would not want to harm that," he said.

Asked whether the crisis was wasted by not introducing deeper structural reforms, Mr Beaumont said the crisis was really about the banks, where an “all-out effort was made” to repair them, and that the reforms “weren’t immediately needed to address the crisis” but progress was being made on them.

Mr Beaumont said confidence would be boosted by the exit.

“There was a sense for people that the programme was a shock: it wasn’t normal. They should feel that there is concrete evidence of progress to a more normal situation,” he said.

“The end of the programme helps confirm that.”