IMF welcomes 'strong' Irish progress over financial reforms

(DUBLIN) - The International Monetary Fund on Thursday welcomed Ireland's strong implementation of financial reforms in exchange for an international bailout of the indebted eurozone nation worth 85 billion euros.

"Programme implementation continues to be strong. The authorities have completed the key initial phase of the comprehensive financial sector reforms launched in March," the IMF said in a joint statement with the European Commission and European Central Bank.

"The fiscal deficit limit of 10.5 percent of GDP in 2011 is expected to be met and important structural reforms are being put in place," the trio added.

Ireland has already begun a drastic overhaul of its stricken banking sector as international experts on Thursday published their third quarterly review of Dublin's financial reforms.

Istvan Szekely of the European Commission said that "positive signs" were emerging in Ireland but warned that much remained to be done.

"Growth is gradually returning. Still the domestic economy remains weak and unemployment is still unacceptably high and this is an area where policy will have to focus," Szekely said.

"There is a lot of very positive things going on in Ireland but I don't think we should lose sight of the risks. Ireland is doing the right thing in terms of what it can control," noted Ajai Chopra, deputy director in the IMF's European department.

Ireland's Finance Minister Michael Noonan welcomed the latest review.

"I am pleased that the mission has concluded that the programme is on track and Ireland is making substantial progress in all the key areas," Noonan said in a statement.

The update comes ahead of a pivotal EU summit this weekend on tackling the eurozone debt crisis that has also led to massive international bailouts for Greece and Portugal and threatened other weaker states including Italy and Spain.