On Sunday, Ireland became the first nation in the Eurozone to pay off the bailout program which it lived on for the past three years. In November 2010 the International Monetary Fund (IMF) and European Union loaned Ireland $115 billion to help rescue its economy, which had plummeted from a historic and terrible housing bubble and a banking collapse. On Friday, the IMF allowed a last $890 million payout after it approved the last review of Ireland’s progress. Now Ireland can rejoin the international lending markets, unlike Greece, Portugal and Cyprus, which are still in the throes of the bailout process.
Prime Minister Enda Kenny will give only the sixth state of the union address in the country’s history that was not during an election period. Transport and tourism minister Leo Varadkar proudly stated to RTE radio that his country was “back on track” and attributed it to the “sacrifices and resilience of the Irish people.” He added:
If you remember two and a half years ago when this government came to office, it was normal for people to be talking about the euro breaking up or talking about the country defaulting (on its debts.) We’re in a much better position now than any other European country that entered a bailout and many that didn’t. But there are of course vulnerabilities. Unemployment is still very high. There’s a big debt burden out there.
The EU, IMF and the European Central Bank, which lent Ireland the money, checked Ireland’s economy every month for three years while they required tax hikes, structural reforms and the sale of state assets.
Despite the fact that Ireland’s unemployment is dropping and the number of banks has been trimmed, there is still great caution; the Irish Sunday Times wrote, “Like a patient discharged from the intensive care unit, the return to full health will take some time.”
The IMF’s managing director Christine Lagarde added, “Unemployment is too high, public debt sustainability remains fragile, and heavy private sector debts and banks’ slow progress in resolving non-performing loans weigh on domestic demand.”
The Sunday Independent wrote that the Irish government will promise to end austerity by 2016, as that is when new elections will occur. The Sunday Times said that the government’s plan will aim for 4.2% unemployment by 2020. Unemployment reached its zenith last year at 14.7% and is now 12.8%.