FUNDS:CAROLINE ATKINSON, director of external relations at the IMF, alluded to the possibility of discussing "the broad framework" of the fund's €22.5 billion contribution to Ireland's bailout at a briefing on Thursday.
Ms Atkinson was asked how a “changed political spectrum” might affect the fund’s dealings with Ireland.
She replied: “The general view is that we deal with the government of the country, regardless of where it is on the political spectrum.
“And it was very important in the case of Ireland and some other cases that we’ve seen broad parliamentary support for the underlying measures under the programme.
“We’ll have a broad framework for the best way to get Ireland’s economy back on track, aiming towards sustained and sustainable growth. And then within that framework different governments would choose different measures, and we’re open to discuss those.
“We do increasingly focus importantly on – especially when countries have big adjustment programmes – on what they are doing to protect the more vulnerable to make sure that the socially needy are borne in mind with whatever policies are put in place.”
Ms Atkinson was asked about the Labour Party bringing up “the whole deficit target in Ireland”.
She replied: “The basic fiscal framework will, of course, be something that will be discussed. That’s one of the key elements of the programme.
“I should also let you know that there will be a report published on Ireland in a couple of weeks’ time that will be based on the technical missions that we’ve had earlier.”
Though phrased slightly differently, Ms Atkinson in essence repeated what Ajai Chopra, who headed the fund’s mission to Dublin, said in a conference call in December: that the fund has no difficulty adjusting to changes of policy in the countries to which it lends money.
The “broad framework” which Ms Atkinson mentioned is understood to refer to the proportion of government spending cuts and tax increases, and the distribution of cuts through various government departments. Benchmarks and programme criteria are reviewed every quarter by the IMF, and the goal of decreasing deficit spending to 3 per cent of GDP by 2015 is not written in stone.
When conditions warrant an adjustment, a waiver or change in programme can be granted by an executive vote.
Interest rates is the one area where there is no flexibility. The IMF determines interest rates according to a complex formula which takes account of the size of the loan and the country. The same formula is applied to 187 IMF members, and cannot be changed for any one country.