DUBLIN Aug 9 Ireland aims to secure a
precautionary credit line later this year to smooth its exit
from an international bailout, and wants any conditions focused
solely on its still-troubled banks, a government source said on
Rescued by Europe and the International Monetary Fund in
late 2010, Ireland is on course to become the first euro zone
country to wean itself off emergency assistance.
Talks with its "troika" of lenders - the IMF, European
Commission and European Central Bank - have now turned to what
kind of safety net would help ease the country's transition back
to funding itself in international bond markets.
The IMF believes Ireland should play it safe and apply for a
credit line which would be drawn on only if needed, and the
government is now of the same mind, the source said.
"The expectation is that something will be agreed by the end
of October, early November that would commence from the start of
December," the source, who has knowledge of the talks on how
Ireland should exit its bailout, told Reuters on Friday.
Ireland's lenders are due to return to Dublin for one last
quarterly appraisal of the bailout in October, when final
details of the post-progamme funding will also be hammered out.
But with Ireland's quarterly bailout targets coming to an
end in December, the government wants any new goals to apply
only to its banks and a fresh agreement that would not specify
what fiscal measures Dublin should adopt, the source said.
In the bailout agreement, the government had to spell out
how it proposed to hike taxes and cut expenditure during the
three years of assistance, part of an austerity drive that is
set to continue until 2015.
Finance Minister Michael Noonan said last month that his
preference would be to secure some type of credit line but that
talks on an exit strategy between the government and its lenders
would not be concluded until later this year.
A precautionary credit line focused on the banks, whose
collapse when a property bubble burst precipitated the country's
economic crisis, could see Dublin adopting a programme similar
to the one Spain signed its debt-stricken banks up to in 2012.
Ireland's mostly nationalised banks, rescuing which cost the
state 64 billion euros, equivalent to 40 percent of annual
economic output, face their first stress tests in three years
next year to gauge their resilience to economic shocks.