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IMF want ESM fund for Irish banks

Tuesday, September 11 10:42:44

The IMF today said that it wants the new ESM fund to inject cash directly in to Ireland's banks as a way of helping Ireland to exit the bailout programme.

"Material investments in Irish banks by the ESM (European Stability Mechanism) could transform the public debt outlook, cut the bank- sovereign link, and cement a needed win for Europe," the IMF said in its latest review of Ireland's bailout.

The IMF see this as a way of separating bank debt from sovereign debt as Ireland was forced to seek a bailout because the E64bn bank debts were underwritten by the State.

Craig Beaumont, IMF mission chief to Ireland, told reporters on Monday that there was a danger the market would be "disappointed" if European leaders failed to follow through on commitments made at an EU summit in June to examine how to make Ireland's adjustment programme more sustainable.

Later this week, Michael Noonan will fly to Paris and Paris, Berlin and Rome to put Ireland's case before Europe's leaders as fears increase that the October deadline for agreement on the restructuring of Irish bank debt will not be met.