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Water protests beginning to ease - IMF

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The IMF says public opposition to water charges is beginning to weaken, as a result of the reduction in charges.

The comments are made in a new report on Ireland's economic progress - although a spokesman says the comments were written before the most recent demonstrations.

The Fund also says the government could need new austerity measures worth over half a billion euro if Irish Water fails the market corporation test.

It says the budget deficit would grow by 0.3% of GDP if the test is failed later this year. If this brings the overall deficit above the EU's 3% target, new measures would be needed to make up the lost ground.

This could mean the government would need nearly €550 million in new measures, depending on the state of other matters in the economy.

The IMF's Craig Beaumont says there will be no easy fixes if the new utility fails the test.

"If [Irish Water] was to be consolidated into government, and if that was to have a significant impact on the deficit - such that it would get closer to the 3% ceiling - if there were any measures needed to offset that impact, we would encourage them to be well-designed and durable measures that minimise the impact on growth," he said.

The IMF's general appraisal of Ireland's performance is positive - although it raises some concerns about the slow progress in removing some households from mortgage arrears.

But it warns that the government's path of restoring the public finances is not yet over, and it says more 'consolidation' measures - meaning, austerity - is still needed.

However Mr Beaumont says this is only about 2% of GDP (or €3.5 billion) over the next three years, which is he said was a 'manageable' amount when spread over so many years.

"Ireland's demonstrated a very steadfast approach to fiscal consolidation over a sustained period, and the amount of adjustment left is quite small compared to the very large efforts that have been made in the past," he said.

"They seem quite manageable."


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