IMF Warns Ireland To Not Ease Austerity

The International Monetary Fund has kept up pressure on Ireland not to ease off on austerity just days after finance minister Michael Noonan said next month’s budget may not need to be as tough as planned. Ministers have been campaigning for months to use the slack afforded by a bank debt deal struck with the European Central Bank to bring in a less stringent budget than the €3.1bn package originally pencilled in.

While the IMF, Ireland’s central bank and, most recently, ECB board member Joerg Asmussen have said the money should be held to cushion the weak economy against any shocks, Noonan said this week there was some flexibility on the severity of tax hikes and cuts. After disbursing Ireland’s latest aid tranche, the IMF, which monitors Ireland’s bailout along with the ECB and European commission, said Dublin should keep up its steady fiscal consolidation to protect its regained access to bond markets. “Narrow buffers make continued careful implementation essential,” said IMF executive board deputy managing director David Lipton.

via The Guardian

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