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Troika want banks monitored after 'disappointingly slow start' on arrears

The conclusion of the Troika’s tenth review mission to Ireland will result in an estimated €2.4 billion being released.

THE TROIKA HAS said that authorities will need to monitor the mortgage arrears crisis closely in order to ensure that banks meet their “ambitious targets” in reducing mortgage arrears.

The tenth review mission said that Ireland’s recovery was continuing. While economic activity had been “weaker than anticipated”, domestic demand had proven to be “somewhat stronger than expected”.

Budget 2013

The group said that the “strict implementation of Budget 2013″ was essential if government was to achieve a deficit ceiling of 7.5 per cent of GDP.

They said that the goverment had remained on track in this regard in the first quarter of 2013.

Banks

The Troika said that while banks were now working towards meeting “ambitious targets to ensure a durable reduction in mortgage arrears”, this would require close monitoring by authorities after what they described as “a disappointingly slow start”.

The group also said that banks needed to further help resolve the debts of small and medium-sized enterprises in order to help create jobs.

Unemployment

“While a pick-up in growth is needed to meaningfully reduce high unemployment, further policy efforts are important to address its increasingly structural nature,” the review said.

The Troika also called for greater engagement with those who remained unemployed, and said that Ireland needed to open up “sheltered sectors such as legal services” in order for it to remain competitive internationally.

It also said that the further disposal is state assets would help “support job-creating investment projects.”

As as result of the latest review, up to €2.4 billion will be made available to Ireland – €1 billion by the IMF, €1 billion by the European Financial Stability Facility (EFSF), and an estimated €0.4 billion through bilateral loans with other EU member states.

Their next review mission is scheduled for this July.

Read: Troika wants Ireland to outline spending cuts for three years >

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Paul Hyland

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