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Irish Republic's economic progress gets EU approval | Irish Republic's economic progress gets EU approval |
(40 minutes later) | |
The Republic of Ireland's progress on deficit reduction has been approved by the European authorities - a condition of last year's bail-out. | The Republic of Ireland's progress on deficit reduction has been approved by the European authorities - a condition of last year's bail-out. |
They have looked at the Republic's performance throughout the first three months of the year and have said that it has met its targets. | |
The country's Finance Minister, Michael Noonan, told a news conference that the bodies had been "very complimentary". | |
Earlier its credit rating was cut again on concern over its financial strength. | Earlier its credit rating was cut again on concern over its financial strength. |
The credit rating agency Moody's marked the country down two notches on the scale to a status just one notch from "junk". | The credit rating agency Moody's marked the country down two notches on the scale to a status just one notch from "junk". |
Such a move typically means that the government will have to pay more to borrowing money. | Such a move typically means that the government will have to pay more to borrowing money. |
The European Union (EU) and the International Monetary Fund (IMF) gave 85bn euros (£70bn, $113bn) in support for the country when it could no longer cope with its debts, largely the result of support for its over-stretched banking sector. | The European Union (EU) and the International Monetary Fund (IMF) gave 85bn euros (£70bn, $113bn) in support for the country when it could no longer cope with its debts, largely the result of support for its over-stretched banking sector. |
Tough | Tough |
Mr Noonan said the authorities behind the bail-out, the EU, the IMF and the European Central Bank, had agreed to certain changes, including the reversal of a cut in the minimum wage. | Mr Noonan said the authorities behind the bail-out, the EU, the IMF and the European Central Bank, had agreed to certain changes, including the reversal of a cut in the minimum wage. |
The bail-out came with strict conditions, including an interest rate which the newly elected government said was too high and pledged to get it reduced. | |
Mr Noonan said "significant progress" had been made on the matter at last week's meeting in Hungary. | |
He said he would take up the matter again at a meeting of eurozone finance ministers next month. | |
The final review documents would be made public once final approval had been given on May 15-16, Mr Noonan said. | |
Moody's cut the Republic's credit score on Friday to Baa3 - one level above junk-bond status - saying it could struggle to cut its budget deficit because of weaker-than-expected economic growth. | Moody's cut the Republic's credit score on Friday to Baa3 - one level above junk-bond status - saying it could struggle to cut its budget deficit because of weaker-than-expected economic growth. |
It stands alone though among the three leading ratings agencies. On Thursday Fitch ratings upgraded its outlook, while Standard and Poor's gives the Republic the same grade as Fitch. | It stands alone though among the three leading ratings agencies. On Thursday Fitch ratings upgraded its outlook, while Standard and Poor's gives the Republic the same grade as Fitch. |
It has a target to cut the gap between government income and spending to 3% of gross domestic product by 2015. | It has a target to cut the gap between government income and spending to 3% of gross domestic product by 2015. |
The Republic's 2010 deficit hit a European record of 32% after it bailed out its crippled banks. | The Republic's 2010 deficit hit a European record of 32% after it bailed out its crippled banks. |