Updated at 17.30
IRELAND’S POLITICAL LANDSCAPE and the public backlash over water charges have both started to calm down in recent months, according to the IMF.
In its latest verdict on the country’s economy, the organisation said its talks with Irish officials in January had taken place against “some settling in the political situation” in the country.
IMF staff also claimed “the water charges issue appears to becoming (sic) less heated after the November 2014 steps to lower fees and set a cap to reduce uncertainty about future charges”.
Developments in Greece are being watched closely given Ireland’s large outstanding debt to its European partners,” it noted.
Ireland’s total debt, compared to the size of the economy, was the fourth largest in the eurozone last year – behind only Greece, Italy and Portugal.
IMF head Christine Lagarde made a flying visit to Ireland in January when she poured cold water on the idea of supporting debt relief for any of the bailed-out European economies.
She also said she hoped the country’s recovery wouldn’t be “wasted by excessive measures” like widespread tax cuts.
Budget target depends on Irish Water
The IMF said it expected Ireland’s to hit its Budget target of a 2.7% deficit this year, which would free it from strict EU spending rules, although that was dependent on Irish Water being kept off the state balance sheet.
The controversial semi-state needs to receive at least half its revenue from private sources to pass the European Commission’s market test, otherwise it will be considered part of government.
Irish Water recently said about one million households – or two-thirds of its potential customer base – had signed up, although it needs a much larger share to pay the charges to meet its income targets.
Meanwhile, tens of thousands took to Dublin’s streets last weekend in the latest Right2Water protests and many dispute the semi-state’s registration figures.
Some 57% of respondents to a TheJournal.ie poll yesterday said they hadn’t signed up with Irish Water and didn’t plan to, while one-third said they were already registered.
Further protests are planned for next month.
In a statement, Finance Minister Michael Noonan said he welcomed the IMF’s statement and its views would be “carefully considered in the context of (the government’s) overall policy development in the medium term”.
“The government is fully aware of the importance of sound budgetary policy in the years ahead, and is committed to a steady adjustment path in reducing debt and maintaining stability,” he said.
First published 3.00pm
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