Deal on Ireland’s euro85B bailout could come Sunday

Protesters make their point during a mass rally in Dublin, Ireland, Saturday, Nov. 27, 2010. An Irish government minister says he expects an agreement Sunday with International Monetary Fund and European banking experts on an euro85 billion ($115 billion) loan for Ireland, but rejects reports that the deal could involve interest rates of 6.7 percent. Ryan spoke Saturday as approximately 15,000 people attended a peaceful protest march in central Dublin denouncing the government's plans to slash spending and accept an EU-IMF rescue. – AP Photo

DUBLIN: An Irish government minister has said he expects an agreement within the next 24 hours on an EU-IMF bailout loan for Ireland worth approximately euro85 billion ($115 billion), but he rejected reports that the aid could come with a punitively high interest rate.

Communications Minister Eamon Ryan said Saturday that all sides in the 10-day-old financial rescue talks in Dublin want at least “an outline agreement” before markets open Monday.

Deal on Ireland’s euro85B bailout could come Sunday

Protesters make their point during a mass rally in Dublin, Ireland, Saturday, Nov. 27, 2010. An Irish government minister says he expects an agreement Sunday with International Monetary Fund and European banking experts on an euro85 billion ($115 billion) loan for Ireland, but rejects reports that the deal could involve interest rates of 6.7 percent. Ryan spoke Saturday as approximately 15,000 people attended a peaceful protest march in central Dublin denouncing the government's plans to slash spending and accept an EU-IMF rescue. – AP Photo

DUBLIN: An Irish government minister has said he expects an agreement within the next 24 hours on an EU-IMF bailout loan for Ireland worth approximately euro85 billion ($115 billion), but he rejected reports that the aid could come with a punitively high interest rate.

Communications Minister Eamon Ryan said Saturday that all sides in the 10-day-old financial rescue talks in Dublin want at least “an outline agreement” before markets open Monday.

Ireland swallows bitter pill, asks EU for loan

Musicians play Irish traditional music in a pub in central Dublin November 21, 2010. Ireland requested an international bailout on Sunday to tackle its banking and budget crisis, the euro zone’s second bailout this year as Brussels moves to protect Europe’s wider financial stability. – Reuters Photo

DUBLIN: Debt-crippled Ireland formally applied Sunday for a massive EU-IMF loan to stem the flight of capital from its banks, joining Greece in a step unthinkable only a few years ago when Ireland was a booming Celtic Tiger and the economic envy of Europe.

European Union finance ministers quickly agreed in principle to the bailout, saying it “is warranted to safeguard financial stability in the EU and euro area.” But all sides said further weeks of negotiations loomed to define the fund’s terms, conditions and precise size.

Oil over 82 dollars after EU, IMF agree Irish bailout

New York's main contract, light sweet crude for January delivery, gained 71 cents to 82.69 dollars per barrel. — File Photo

SINGAPORE: Oil prices topped 82 dollars in Asian trade Monday as the euro’s value soared following the agreement of a massive bailout for financially strapped Ireland, analysts said.

New York’s main contract, light sweet crude for January delivery, gained 71 cents to 82.69 dollars per barrel.

Brent North Sea crude for January rose 77 cents to 85.11 dollars. Oil prices followed the euro up as the European Union (EU) and International Monetary Fund (IMF) late Sunday agreed to bail out debt-ridden Ireland to the tune of between 80 and 90 billion euros.

Ireland clinging to cherished corporation tax rate

A man walks past newspaper headlines posted on a news stand on O'Connell street, Dublin, November 19, 2010. A financial aid plan to help Ireland cope with its battered banks will be unveiled next week, EU sources said on Friday, but experts warned a rescue may not be enough to prevent contagion to other euro zone members. - Photo by Reuters.

DUBLIN: A major stumbling block in talks between the EU, the IMF and Dublin is Ireland’s 12.5 per cent corporation tax rate, which has helped attract international companies and spark growth.

The rate, one of the lowest in the world and a key reason why companies such as Google and Microsoft do business in Ireland, is under severe pressure as negotiations on a bailout package continue in the Irish capital.
The European Union and the International Monetary Fund want to see it raised in return for any bailout for Ireland and its debt-ridden banks.

IMF projects 14pc inflation, 2.75pc GDP growth

The IMF noted although the major export plants had escaped physical damage, cotton and textiles exports might be lower. — File Photo

WASHINGTON: The International Monetary Fund has projected that during 2010-11 Pakistan will have an average inflation rate of 14 per cent and a real GDP growth of 2.75 per cent. 

“The balance of payments is expected to weaken in 2010-11, due in part to the impact of the floods,” said an IMF statement issued in Washington on Tuesday.

“Imports will rise as food and other basic goods will need to be sourced from abroad and imports of capital equipment for reconstruction will increase,” the statement said.

Europe, IMF launch ‘urgent’ Irish rescue mission

A pedestrian passes a newsstand on O'Connell Street in central Dublin. Ireland came under intense pressure to request aid over its debt crunch in what the European Council’s president called a “survival crisis” for the euro zone and the wider European Union. –Reuters Photo/Cathal McNaughton

BRUSSELS: Europe and the International Monetary Fund announced Tuesday the launch of an urgent mission to Dublin to finalise emergency support for Ireland’s devastated banking sector.

The arrival of experts from the European Commission, the European Central Bank and the IMF represents a further blow to Irish hopes it can ride out its debt crisis alone, although Dublin has yet to accept money.

It underlines fears among euro partners for the broader stability of the soon-to-be 17-nation currency area, after a bottomless banking bailout pushed Ireland’s public deficit beyond 30 per cent of output this year.

IMF conditions hitting businesses: Humayun Akhtar

KARACHI: The International Monetary Fund’s prescription of hiking interest rates, taxes and power tariffs in the country will be counterproductive for the manufacturing sector and economy on the whole, a former commerce minister and businessman said.

In a meeting with bed linen exporters, the former minister, Humayun Akhtar Khan, said the interest rates have been cut globally to encourage businesses while in Pakistan, the situation is exactly otherwise.

“The economy is sustaining on the IMF loans and the government is blindly following its dictations,” he said. Akhtar said that the foreign direct investment (FDI) must be channelised into export-based industries, not just in telecom and power sectors, to strengthen the economy.

IMF, govt agree to revise inflation target to 15 percent

 ISLAMABAD: Pakistan and the International Monetary Fund (IMF) have decided to revise the inflation target to 15 percent from 13.5 percent for the current fiscal year in the wake of rise in commodities’ prices and electricity tariff, The News has learnt.

The inflation target was fixed at 9.5 percent in the budget and later revised to 13.5 percent.
Federal Public Sector Development Programme (PSDP) has been slashed to Rs150 billion from Rs 280 billion. Both sides have also agreed to cut the provincial annual development programmes by 50 percent.

China, India, Brazil become ‘major players’ at IMF

IMF chief Dominique Strauss-Kahn. –Photo by AFP

WASHINGTON: China and India received long-sought recognition Friday as global economic heavyweights as the International Monetary Fund gave them and other emerging powers a significantly larger role in stabilizing the world economy.

IMF chief Dominique Strauss-Kahn announced planned reforms to the fund’s voting power after a meeting of the organization’s board, declaring that no longer would emerging economies feel that they are ‘‘invited to the table, but minor players.’’

Pakistan ready for tax reforms, says IMF

Tax reform is also needed to make the tax system more equitable: Adnan Mazarei.—Reuters

WASHINGTON: Pakistan supports a general sales tax and changes to its energy industry, the International Monetary Fund said on Saturday while reporting on its talks with the country.

The IMF and Pakistan also have agreed on a budget deficit target for the 2011 financial year to help flood victims and reduce inflation, said a statement issued by the IMF headquarters in Washington.

Adnan Mazarei, the leader of an IMF staff mission which held a series of meetings in Islamabad this week, praised the country’s efforts to stabilise its economy.

IMF loan tranche uncertainty drags KSE lower

 KARACHI: The Karachi share market dropped on Wednesday owing to uncertainty about the release of the next tranche of the International Monetary Fund (IMF) loan to the country, dealers said.

“Negative activity was witnessed because of concerns about the country’s fiscal position as government officials met an IMF team to discuss the release of the next tranche,” said Ahsan Mehanti, a director at Arif Habib Investments.

The KSE 100-share index lost 64.22 points, or 0.60 percent, to close at 10,617.65 points. The KSE 30-share index shed 91.30 points, or 0.89 percent, to end at 10,168.59 points. Shares of 375 companies were traded, out of which 153 advanced, 203 declined, while 19 remained unchanged.

IMF concerned over Pakistan’s economic reforms

KARACHI: The International Monetary Fund (IMF) has expressed concern over Pakistan’s slow implementation of energy sector reforms and a revised general sales tax, officials said on Tuesday.

The IMF and Pakistani officials are meeting in Islamabad to discuss the possible release of the sixth tranche of an $11 billion emergency loan agreed in November 2008, which has kept the economy afloat. Talks end on Tuesday.

“Though things are not very good, it is still too early to say whether the sixth tranche is in danger,” an official source said.

If the IMF does not approve the release of the sixth tranche other donors would be hesitant to provide aid or loans, as well, which would threaten Pakistan’s economic stability.

Crucial talks with IMF, WB put off for three days

The talks have been suspended so that the economic managers could seek President Zardari's intervention in taking difficult economic decisions.—Reuters photo

ISLAMABAD: The crucial talks between the government and twin missions of the International Monetary Fund and World Bank remained suspended for a day on Tuesday and then put off for another two days to seek top level political intervention in difficult economic decisions.

Informed sources told Dawn that the two sides were originally scheduled to conclude on Tuesday, or latest by Wednesday, their negotiations on macroeconomic framework and on a strategy for economic stabilisation and containing the rising fiscal deficit.

G20 must do more on financial supervision: IMF head

International Monetary Fund (IMF) Managing Director Dominique Strauss-Kahn speaks to the media during a news conference after the G20 Finance Ministers and Central Bank Governors meeting in Gyeongju October 23, 2010. – Reuters Photo

AGADIR: The Group of 20 leading economies must do more to strengthen international supervision of the financial sector, International Monetary Fund chief Dominique Strauss-Kahn said on Monday.

G20 leaders are due to meet in South Korea on Nov. 11-12 for a summit which is expected to focus on tackling imbalances in the world economy and reducing the risk of a currency war.

Speaking at a conference on human development in the Moroccan city of Agadir, Strauss-Kahn said the financial sector — blamed by many for triggering the global economic downturn — also remained a preoccupation.

Power tariff to be raised by 2pc a month

A joint delegation of IMF, World Bank and ADB called on Federal Minister for Water & Power Raja Pervez Ashraf in Islamabad.—Online

 

ISLAMABAD: The International Monetary Fund (IMF) has criticised slow progress on taxation and power sector reforms and sought in two days a clear plan from the government about controlling the increasing fiscal deficit.

In the first round of policy discussions, a review mission of the IMF and World Bank headed by Adnan Mazarei held meetings on Monday with Finance Minister Dr Abdul Hafeez Shaikh on tax reforms and the macroeconomic situation and with Minister for Water and Power Raja Pervez Ashraf on power sector reforms.

Problematic tax reforms

The international community has stressed upon the government to effectively bring influential groups into the tax net. — File Photo
Revenue expansion continues to be one of the biggest challenges for the economy. Policy makers agree that without sustainable revenue growth, the state cannot step up development, reduce poverty and provide efficient service delivery. As a result, it can neither improve living standards of the people nor think of economic and political sovereignty.

The international community has stressed upon the government to effectively bring influential groups into the tax net while seeking its support for long-term macroeconomic stability and economic recovery.

Policy-level talks with IMF to begin tomorrow

ISLAMABAD: Pakistani officials and the visiting review mission of the International Monetary Fund (IMF) will start crucial policy level talks from Monday to decide the fate of the $1.7 billion tranche of the Standby Arrangement (SBA), it is learnt.

Federal Finance Minister Dr Abdul Hafeez Sheikh and SBP Governor Shahid Hafeez Kardar will lead the Pakistani side, while the IMF’s delegation will be headed by Adnan Mazarei, mission chief for Pakistan. The policy level talks, officials said, would continue for two to three days.
During the technical level talks, Pakistani and IMF officials finalised targets of real GDP growth at 2.8 percent, inflation at 14.5 percent, current account deficit at minus 2 percent and FBR’s revenue collection at Rs1,689 billion provided the government took additional measures such as imposing flood tax and abolishing sales tax exemptions.

IMF power deal sealed after US dropped trade links

WASHINGTON: A last-minute deal among G20 nations to give emerging economies more voting power at the IMF was made possible when the United States abandoned efforts to link the shift to trade balance targets, sources said on Wednesday.

US Treasury Secretary Timothy Geithner introduced the idea of tying actions to bring about a better-balanced global economy to more International Monetary Fund voting power during meetings of the Fund in Washington last month.
Geithner fleshed out his proposal in a letter to finance ministers of the Group of 20 nations in which he pressed for a deal to limit current account surpluses and deficits to a specified share of national output.

What to expect from IMF’s next meeting

KARACHI: Officials of the International Monetary Fund (IMF) and Pakistan are due to meet on Wednesday in Islamabad to discuss the country’s performance for the release of the sixth tranche of a $11 billion IMF loan.

Policy level discussions will take place on November 1-2, according to official sources.

The last review was completed in May and the review for the release of the sixth tranche has been delayed since August over several issues, such as an increase in power tariffs and the implementation of a reformed general sales tax (RGST).