The International Monetary Fund (IMF) says discussions are taking place with Ireland to put precautionary facilities in place should an exit from the bailout not materialise as planned later this year.
The fund also says it will not support using any benefits from the promissory note deal to ease the budget next year. And it warns the taxpayer may yet face more bills for liquidating the Irish Bank Resolution Corporation (IBRC).
The IMF warns the coalition to stick rigidly to the budget this year as the buffers are small. And it is demanding €3.1 billion in tax hikes and spending cuts next year saying staff would not support easing austerity by using any benefits from the pro-note deal.
And it warns that a sell-off of the assets of the IBRC could result in a compensation to NAMA that the taxpayer would have to foot. The fund warns the government and banks to deal with mortgage arrears as it is a drag on growth.
The economy will grow by 1% this year and 2% in 2014 it predicts.
Discussions on a bailout exit continued including what is called a "backstop" arrangement with the ESM, which would also require seeking support from the IMF if we cannot exit the bailout and return to the markets as planned later this year.
