DUBLIN: Ireland will become the first eurozone country to exit its bailout in December, Prime Minister Enda Kenny said, warning, however, there was still some way to go to full recovery.
Ireland was forced to turn to the European Union and the International Monetary Fund for an ¤85bn ($115bn) bailout in 2010 after its banks collapsed and its overheated property market went into meltdown.
Kenny told a conference of his Fine Gael party on Saturday there were “fragile times” ahead and a budget due tomorrow would be tough, but that Ireland was ready to leave the bailout.
“Tonight I can confirm that Ireland is on track to exit the EU-IMF bailout on December 15. And we won’t go back,” he said.
“It won’t mean that our financial troubles are over. Yes, there are still fragile times ahead. There’s still a long way to go.
“But at last, the era of the bailout will be no more. The economic emergency will be over.”
Kenny admitted the budget would include another ¤2.5bn ($3.4bn) in tax rises and spending cuts.
But he said it would leave Ireland running a 4.8 percent deficit next year, and pledged that the government would publish a new economic plan for the medium term by the end of the year.
Ireland enjoyed double-digit economic growth for a decade from the mid-1990s, earning it the nickname of the “Celtic Tiger”, but it was hammered by the 2008 global financial crisis.
In return for the bailout, the government was forced to introduce stringent austerity measures.
But it has been described as a “poster boy” for bailed-out EU economies, exiting recession in the second quarter of this year with growth of 0.4 percent thanks to solid expansion of its construction and export sectors.
If Ireland does leave the scheme in December, it will be the first of the four bailed-out eurozone countries to do so.
Financial packages have also been given to Cyprus, Greece and Portugal.
Kenny recalled that during his 2011 election campaign, “I addressed the Irish people and said that I wanted to be the taoiseach (prime minister) who would retrieve our economic sovereignty and independence”.
“The decisions we have taken, many of them tough — government and people working in partnership — mean that this goal is now within our grasp,” he said.
There is much at stake politically for the coalition government in Tuesday’s budget.
Finance Minister Michael Noonan has said savings and income would be found from one-off sources as called for by the junior coalition partners Labour but advised against by the Central Bank.
The smaller adjustment than expected at one time is seen as a much-needed boost for Labour as the party’s support is languishing at six percent in the latest opinion poll in The Irish Times newspaper.
It represents the party’s lowest approval rating since 1987 and marks a considerable collapse since it won a record 19.45 percent of the popular vote in the 2011 election before many campaign promises were swallowed up in an austerity-led programme of government.
Conall MacCoille, chief economist with Davy stockbrokers in Dublin, told AFP before Kenny announced a bailout exit date that the markets would have preferred to see bigger cuts in this budget.
“We would have preferred to have seen 3.1 billion euros and get the bad news over and done with,” he said.
“The main motivation for this is probably political and it’s a little early in the political cycle to see this kind of slippage.”