IMF approves first tranche of €22.5-bn loan to Ireland

The International Monetary Fund (IMF) yesterday approved a €22.5-billion loan programme for Ireland as part of the €85-billion international rescue package to support the nation's banking system and restore its public finances.

Earlier this week, the global lender had said that it would postpone the approval of the deal until the Irish parliament (Dais) endorses the financial rescue package. (See: IMF postpones Irish rescue deal until 16 December)

A preliminary deal with the EU and IMF on the bailout was reached on 28 November. (See: Ireland succumbs to EU, IMF on €85-bn bailout)

On Wednesday, the Dais gave its approval for the EU / IMF-led rescue package to prop up the Celtic nation's struggling economy from the debt crisis triggered by the nation's banks. The deal was passed with a thin majority of 6 votes, with 81 in favour and 75 against.

European Financial Stabilization Mechanism (EFSM) and European Financial Stability Facility (EFSF), and bilateral loans from the UK, Sweden and Denmark, will provide €45 billion of the total funding and €17.5 billion will come from Ireland's own cash reserves and liquid assets.

The IMF loan has been approved under its fast-track emergency financing mechanism, and as a result, around €5.8 billion is expected to be released immediately.

IMF managing director Dominique Strauss-Kahn said, ''The Irish authorities have designed an ambitious package to address the economic crisis facing the nation.''