Prime Minister Enda Kenny said Ireland has begun to win back bond investors after cutting the budget deficit and maintaining economic growth, boosting his government’s goal to exit its financial-aid program this year.
“Internationally, investors are showing a new confidence in Ireland,” Kenny told the European Parliament today in Strasbourg, France. “The result has been seen in lower yields on Irish government bonds.”
Ireland, which took over the 27-nation European Union’s rotating six-month presidency on Jan. 1, wants to be a symbol of economic recovery after following Greece in 2010 in needing a financial rescue from the euro area and the International Monetary Fund. Since then, Portugal, Spain and Cyprus have also sought international bailouts.
The Irish economy probably grew for the second consecutive year in 2012, while the government in Dublin narrowed the budget deficit to almost 8 percent of gross domestic product last year from more than 13 percent of GDP in 2011, according to the European Commission.
“We are bringing government spending under control,” Kenny said. “We are determined to exit the EU-IMF program before the end of this year.”
Last year, as Greece’s economic collapse forced the government in Athens into a second rescue, doubts rose about Portugal’s ability to stick to deficit-cutting targets, speculation grew about a possible Spanish request for further aid and negotiations bogged down over the Cypriot bailout, European leaders held out Ireland as a model for recovery.
Jose Barroso, president of the European Commission, the EU’s executive arm, painted that image again today.
“The Irish people have had to make great sacrifices to ensure the recovery of the country,” Barroso said in a speech to the EU Parliament after Kenny’s remarks. “The Irish case shows that, provided there is the political will to accompany the sacrifices, programs can and do work.”
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