Tags: Ireland | Exit | Euro | Rescue

Ireland Aims to Be First to Exit Euro Rescue

Friday, 07 Oct 2011 09:52 AM

Ireland aims to be the first of three bailed-out euro-area countries to exit their rescue program, Irish Prime Minister Enda Kenny said.

Kenny said the government wants to test sell debt in 2012 and wants to be in the market “as soon as possible.” Ireland will “in time be upgraded by the rating agencies,” Kenny said.

“Of all the countries in difficulty, Ireland leads by example,” Kenny said in a Bloomberg Television interview in Dublin today, adding that the nation is best positioned to be the first to “wave goodbye to the IMF.”

The government, which needed help from the International Monetary Fund and European Union last year, is planning as much as 4 billion euros ($5.4 billion) in savings next year to cut its deficit further. Ireland was forced out of credit markets as debts at its banks became too large for the state to handle.

Kenny said he expects to beat the 2011 budget deficit target of 10.6 percent of gross domestic product set by the IMF and EU. Ireland’s shortfall, excluding capital injections into its banks, declined by more than 3 billion euros in the first nine months of the year, according to the finance ministry.

Ireland’s 10-year borrowing cost, which reached 14.22 percent in July, has dropped to about 7.70 percent. It was the second euro country to need a rescue, getting 67.5 billion euros, after Greece’s 2010 package and one for Portugal this year.

Kenny, who came to power in March, is seeking to reduce the government’s deficit to 3 percent of GDP by the end of 2015.

Ireland’s central bank cut its growth forecast to 1.8 percent on Oct. 4 from 2.1 percent as consumer spending falls and export growth declines. The Dublin-based central bank urged the government to frontload budget cuts to protect its finances from “negative shocks.”

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