Ireland Making "Good Progress" Says EU/IMF

Ireland has met the financial targets set down under the terms of its bailout deal "by comfortable margin", according the first review of its progress.

The troika of the International Monetary Fund (IMF), European Central Bank (ECB) and European Union (EU) said they believed the state was making "good progress" on overcoming the worst economic crisis in its recent history.

They said the new government had taken full ownership of the goals and elements in the rescue package.

However, they warned that challenges remain and "steadfast" policy implementation would be the key to returning to growth.

At a news conference in Dublin last Friday, Ajai Chopra, from the IMF said the program was a "lifeline for Ireland".

"It represents an Irish solution to an Irish problem," he said, clearly unaware of the irony that usually attaches itself to that statement, "and it enjoys our support."

He said the new government was making "good headway" in dealing with the banking crisis.

At a separate news conference on the same day, Finance Minister Michael Noonan said a revised memorandum of agreement would be published next month with the troika, to take account of the new government's changed priorities.

Among the measures it will include are: a reversal of the €1 cut in the minimum wage restoring it to €8.65 per hour; the incorporation of a jobs initiative promised by the government during its first 100 days; no further transfer of assets will be made to NAMA and banks will keep all the smaller loans now on their books and work them out; and the acceptance of a spending review by the government to be completed by September.

Teams from the IMF, ECB and EU visited Dublin from April 5th to 15th for the first review of the bailout deal.

The next view is due at the end of July.

Finance Minister Michael Noonan says Ireland has "got over the first jump" on the road to recovery.

But even as the technocrats behind the deal were giving Ireland a pat on the back, ratings agency Moody's was giving it yet another kick in the teeth.

The agency has now downgraded Ireland's rating to one level above junk status, saying an expected decline in government finances would hold back recovery.

Downgrades by ratings agencies usually mean governments have to pay more to borrow money.

Mr Noonan said he intended to continue to push for a reduction on the interest rate being charged on the bailout deal at an EU meeting of finance ministers in May.

He said he was hopeful that could be agreed on the same date that a rescue package is put in place for Portugal, which has become the latest EU country to accept it needs outside help.