Financial assistance to Ireland

KEY POINTS

• In December 2010, the EU agreed that Ireland required €85 billion in financial assistance between 2010 and 2013. The funding was provided by:
  • EU: €22.5 billion through the European financial stabilisation mechanism (EFSM) and €17.7 billion through the European Financial Stability Facility;
  • bilateral loans: €4.8 billion — from the UK (€3.8 billion), Sweden (€0.6 billion) and Denmark (€0.4 billion);
  • International Monetary Fund (IMF): around €22.5 billion;
  • Ireland: €17.5 billion from its cash reserve and national pensions reserve fund.
• The financial agreement set out in the economic adjustment programme for Ireland required its government to:
  • strengthen and reform the banking sector;
  • restore fiscal sustainability and reduce the country’s deficit to below 3% of gross domestic product (GDP) by 2015;
  • implement labour market reforms to return to robust and sustainable growth.
• In December 2013, the assistance programme came to an end.
• Ireland is now subject to the EU’s post-programme surveillance (PPS). Under this, the European Commission, liaising with the European Central Bank:
  • carries out regular visits to the country to assess its economic, fiscal and financial health;
  • prepares half-yearly reports to monitor progress and determine whether further measures are needed.
• The surveillance will continue until Ireland has repaid at least 75% of the loans it received. Barring any early repayments, that requirement will be met by 2031.