Transcript of Irish re-structuring programme published

Monday, November, 2010

The transcript of the press conference on the re-structuring programme for Ireland has been published this evening by the IMF.

Some noteworthy parts of the transcript:

  • Ireland’s corporation tax rate of 12.5% is not part of the program
  • there is reference to “underlying strength in Ireland’s position”, based on the understanding that 21% of the funding (i.e. the €17.5 billion of the total €85 billion package) will come from Ireland, which, according to Ajai Chopra, the economist who is leading the IMF mission in Ireland, makes Ireland “quite unique in these sorts of arrangements”
  • the interest rate on the loan appears to average 5.8% but more clarity is needed on this because a 3.1% rate appears to apply in respect of the IMF part of the package
  • the program will feature milestones and quarterly reviews – a feature of all IMF re-structuring programs
  • the latter characteristic basically means that all spending and tax decisions will require sign-off by the IMF/EU – this is how Ireland’s loss of economic sovereignty will manifest itself and there is a risk that a ‘cat-and-mouse’ game could occur in which Irish economic policymaking becomes designed to appease the external checkers and therefore may lack imagination: this is where strong leadership both among the (new) Irish government and the IMF/EU will be required to ensure that the programme has long-term impact
  • Finally, it’s nice to know that Mr. Chopra considers that “You have here excellent economists on this side”.

Watch out for: the OECD is to publish the latest results of its latest PISA survey on 7 Dec 2010.  According to the OECD, “How have 15-year old students performed in the 65 economies that took part in the latest OECD PISA – Programme for International Student Assessment – tests? For the first time, this edition of PISA will show how student performance in each country has evolved over time by comparing the reading, mathematics and science results with previous PISA surveys from 2000, 2003 and 2006”. These survey results will be important in informing competitiveness comparisons.

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