We’re so vain
Clearly overnight the government was told that the tactic of sending the Brians out to deny the obvious — that we are negotiating a loan — was making things worse so the new spin today is that because we’re so special, the IMF is designing a special type of loan just for us. One where a headline amount of money is specified but is only drawn down if actually needed. So it won’t really be an IMF loan because it will just be sitting there like a new piggy bank.
Luckily for the IMF, they won’t actually have to redesign all their policies to come up with such a uniquely Irish loan — because it’s how they’ve been lending for about the last 50 years. It’s called a stand-by arrangement (SBA) as the Fund’s website says, it’s their workhorse lending arrangement. The only recent innovation — and the one that the government today hinted they are looking at — is a “High Access Precautionary Arrangement” (HAPA), which is just the standard SBA with a bigger headline amount and less presumption that it will be drawn down than a regular arrangement.
During the crisis, it was used by Costa Rica, El Salvador, and Guatemala. We are truly in select company!