Ministers approve Ireland's €4.2bn tranche

EURO ZONE finance ministers last night gave their approval for the payment of a €4.2 billion bailout loan to Ireland under its EU-IMF rescue. The money is included in an €8.5 billion disbursement which will take the total released so far this year to some €39 billion.

The release of this money, which follows a positive “troika” assessment of Ireland’s execution of the bailout programme, was approved at a meeting in Brussels which was dominated by the debt crisis in the euro zone.

The approval of the new Irish loan came as the ministers endorsed the release of a delayed €8 billion payment to Greece, which needs the money to avert bankruptcy within weeks.

The wider group of finance ministers from all 27 member states is today expected to endorse the European element of the new payment to Ireland.

“Now after the first anniversary of the EU-IMF programme for Ireland, despite the prevailing challenges, Ireland is recovering and the programme is on track,” said EU economic and monetary affairs commissioner Olli Rehn. “That’s very important and it is a positive reference point for other cases.”

The €4.2 billion will be released via the European Financial Stability Facility bailout fund, which is operated by euro zone countries, and the European Stability Mechanism fund, which is operated by the Commission.

Included in the latest disbursement is a separate sum of €500 million from Britain, which is not in the euro zone and therefore not a participant in the EFSF. This will be the second payment under Britain’s €3.8 billion bilateral loanscheme for Ireland.

In the coming weeks, the executive board of the International Monetary Fund is expected to approve the release of another €3.8 billion under its portion of the Irish bailout.

“Having fulfilled the conditions for the third quarter, we expect no difficulty in the decision being taken to authorise the disbursement of funds to Ireland,” said Minister for Finance Michael Noonan as he arrived in Brussels.

“That’s the kind of bread-and-butter decision that we need to make sure is in place to keep the country running going forward.”

Information circulated by the European Commission in advance of the meeting suggests the total contribution to Ireland’s bank recapitalisation plan under the bailout is now expected to drop to €16.5 billion from the €35 billion earmarked at the time of the rescue one year ago.