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Ireland shuns credit line after bailout ends


economy

Ireland shuns credit line after bailout ends

Ireland says its economy has recovered sufficiently that it does not need a line of credit after it ends its bailout next month.

The precautionary credit line was being offered as a safety net in case more problems are discovered with Ireland’s banks.

Prime Minister Enda Kenny told parliament that with the economy growing and the deficit shrinking, there is enough market confidence in place for Dublin to not need additional aid from the EU: “This is the latest in a series of steps to return Ireland to normal economic and budgetary funding conditions. Like most other eurozone countries, for 2014 we will be in a position to fund ourselves normally on the markets.”

He added: “We still have a long way to travel but clearly we are moving in the right direction.”

Three years after being unable to raise a cent on bond markets, Ireland has funded itself into 2015 with timely debt issuance over the last 18 months, helping create a much-needed success story for the rest of the eurozone.

The economy came out of recession earlier this year, but it still faces challenges, with unemployment above 13 percent and spending depressed by salary cuts and tax hikes.

Bank concerns persist and lenders will complete a review of the quality of their assets – an exercise conducted in advance of Europe-wide stress tests next year – later this month.

While state-owned Allied Irish Banks said in a trading update on Thursday that it was improving in line with expectations, Belgium’s KBC forecast surging provisions for loan losses at its Irish unit.

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