The massive extra capital Ireland needs to beat the financial crisis can be funded “comfortably” under existing European Union-International Monetary Fund schemes, a statement issued in Brussels has confirmed.

The joint declaration from the European Commission, the European Central Bank and the ECB, described the new assessment of the country’s needs based on comprehensive stress tests of the banking system as: “A major step toward restoring the Irish banking system to health which is crucial for sustained revival of growth and employment.”

The statement said: “As part of the EU-IMF programme, the Central Bank, together with leading international consulting firms, has identified the banks’ capital needs based on thorough and transparent valuations of bank assets and rigorous stress tests conducted with an appropriately high minimum capital ratio, which will ensure a sound capital basis of the banks. The process was conducted in consultation with the staffs of the European Commission (EC), ECB and IMF, who have reviewed the methodology.

“The EC, ECB and IMF therefore share the rigorous capital needs assessment and strongly support authorities’ plans to ensure that these capital needs are met in a timely manner.

“The capital needs can be funded comfortably under the programme supported by the EU and IMF.”

The statement said the Commission, the ECB and the IMF endorsed the strategy of focussing on the development of “a few strong pillar banks with sound business models, able to serve the Irish economy’s needs”, adding: “The detailed restructuring plans for the banks are to be notified to the Commission for approval under state aid rules. The Commission will assess the plans based on established criteria, taking into account market structures and the need to keep markets open.

“The staff of the EC, ECB and IMF look forward to discussing progress with implementing the measures announced today, together with a broader range of economic issues, during the programme review mission starting next week.”

PA