Ireland bailout on track amid contagion risks

Ireland's bailout is on track but the program must be enacted strongly to limit potential contagion from the eurozone debt crisis, the International Monetary Fund said on Thursday. Experts from the European Commission, European Central Bank and IMF presented their second review of Dublin's implementation of an EU-IMF bailout agreement worth 85 billion euros ($121 billion). "The teams' assessment is that the program remains on track and is well financed," the trio said in a joint statement following a quarterly progress report on Ireland. "The authorities have continued to steadfastly implement program policies. Tensions in sovereign bond markets have escalated during the visit but program financing is cushioning the impact of this shock on the Irish economy and public finances. "Continued strong policy implementation will be important to limit potential contagion effects," the statement added. The IMF update comes as investors are on red alert over the eurozone debt crisis which has already dragged down Greece, Ireland and Portugal who needed to be rescued with vast bailouts. There are real fears that Italy and Spain could be next in line, while Greece urgently needs a second rescue package. In order to secure its own IMF-EU bailout, Ireland in March ordered a drastic overhaul of the eurozone nation's stricken banking sector, as the cost of rescuing its lenders was forecast to top 70 billion euros. The Central Bank of Ireland said that four lenders needed to raise an extra 24 billion euros after it carried out vital stress tests on their ability to withstand another financial crisis. The Irish government, headed by Prime Minister Enda Kenny, welcomed the latest update from the IMF. "This review was very much about seeing where we are in relation to the conditions of our program and its specified targets," Finance Minister Michael Noonan in a statement. "I am pleased that the mission has concluded that Ireland is meeting all of the conditions and targets of our program. "We have met the fiscal targets. We have met the banking targets. We have met the structural reform targets. "I am also pleased that the external partners have concluded that the Irish program is on track and we are making good progress," he added.