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Ireland to exit bailout

October 13, 2013

Ireland's prime minister has told his party conference that his country will become the first eurozone member to exit an international bailout in December. However, he said there is still a long way to go.

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Ireland's Prime Minister Enda Kenny . Photo Reuters
Image: Reuters

Prime Minister Enda Kenny has told a gathering of his Fine Gael party in Dublin that "the economic emergency will be over" when the country exits its 85-billion-euro ($115 billion) bailout on December 15.

"There's still a long way to go. But, at last, the era of the bailout will be no more," Kenny said on Saturday. "Two years ago, 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 prime minister announced. "This goal is now within our grasp," he added.

Earlier, Finance Minister Michael Noonan said the country's budget deficit would fall to 4.8 percent in 2014 from 7.3 percent in 2013, well within targets agreed with the EU.

The coalition government of Fine Gael and the Labour Party is due to release a budget next week to cut the budget deficit by one-third, with a 2.5-billion-euro package of spending cuts and tax rises.

The Finance Ministry had announced this week that the economy was expected to grow 0.2 percent this year and grow by 1.8 percent in 2014.

It is not clear if Ireland will need a precautionary credit line to insulate it against market shocks. Noonan indicated the country may exit the bailout without the credit line. This would block Ireland from accessing the European Central Bank's Outright Monetary Transactions (OMT) program of government bond purchases.

In late 2010, Dublin received a bailout from the European Union and International Monetary Fund worth 85 billion euros, which forced it to introduce major austerity measures.

jm/av (Reuters, AFP)