The three organisations involved in Ireland's bail-out programme have said it is on track after the first three months of the year. Earlier, Finance Minister Michael Noonan said changes to the programme had also been agreed.

The European Commission, European Central Bank and International Monetary Fund said Ireland was making 'good progress' in overcoming the worst economic crisis in recent history, but must continue to implement the plan.

They said budget targets up to the end of March were met 'by a comfortable margin'. The three bodies backed the banking measures announced last month by the Government as 'a major step' towards restoring the banks to health.

Finance Minister Michael Noonan said the minimum wage would be restored to its previous level of €8.65 an hour, while there would be a reduction of 50% in employer PRSI for income up to the minimum wage. A Government statement said a review of other employment agreements was also included in the programme.

Mr Noonan said the troika had agreed to the Government's plan for a 'jobs initiative' to boost employment, but this would not be announced until May in the Dáil. He said the measures announced in May had to be 'fiscally neutral'.

He said the organisations had also backed the Government's plan for a comprehensive spending review, while it was also agreed that the transfer of loans from smaller borrowers to the National Asset Management Agency would not now take place.

The Government said it had also asked that the timing of the drawdown of funds under the programme be changed to take account of the lower banking recapitalisation cost of €24 billion. €35 billion was set aside for the banks under the original agreement.

Minister for Public Expenditure & Reform Brendan Howlin said the changes agreed today were a 'very important first step'.

Minister Howlin said Ireland's international partners had accepted and endorsed the actions of Government so far. He said it was important to establish a relationship with people who would be part of Ireland's landscape for 'the next little while'.

A revised memorandum of understanding setting out the details of the agreed changes will not be produced today, as it must be cleared in Washington, Brussels and Frankfurt. Final approval is expected on May 15 and 16.

Despite today's announcement, the yield on Irish 10-year bonds jumped to 9.83% this evening, mainly due to renewed worries about Greece.

Noonan hopes for corporation tax agreement

Asked about corporation tax, Minister Noonan said it had been on the agenda for years, and the European Commission was now obliged to bring forward policy papers on the issue.

He said the Government had no problem in participating on a debate, and all countries had difficulties with different issues on corporation tax.

He said a process at official level was underway which he hoped would culminate to an agreement to be sanctioned at ministerial level.

The Minister also said that NAMA had to ensure that there was a property market in Ireland, commercially and residentially. He said he had met the NAMA board and made his views on the issue known.

Mr Noonan said NAMA had to start putting properties on the market to establish a floor, and once that happened the market would be restored.

ECB defends stance on bondholders

Speaking at a press conference in Dublin, the IMF's Ajai Chopra said Ireland was making good progress on sorting out the banking crisis. He also said that the IMF had not adjusted its medium-term forecasts for Irish growth, despite lowering its forecast for this year.

Asked about the reversal of the cut in the minimum wage, Mr Chopra said it was an issue for Ireland to decide. He said meetings with business leaders, trade unions and others revealed divergent views.

Mr Chopra described the programme agreed between the troika and the Government as 'a lifeline for Ireland' and said it was 'an Irish solution to an Irish problem'.

The ECB's Klaus Masuh said the bank believed burden-sharing with senior bank bondholders would have been risky and could have undermined confidence in the banking sector. He denied that the ECB was 'threatening' Ireland, adding that it was providing an 'unprecedented' €130 billion of loans at very low rates to Irish banks.

Istvan Szekely of the European Commission spoke about the 'sheltered sectors' of the economy, mentioning the legal profession and the pharmaceutical area in particular. He said reforms in this area were aimed at making the consumer king, increasing competition and allowing the sectors to lower prices. Proper regulation was also part of the plan, according to Mr Szekely.

The ECB's Klaus Masuh said the bank believed burden-sharing with senior bank bondholders would have been risky and could have undermined confidence in the banking sector. He denied that the ECB was 'threatening' Ireland, adding that it was providing an 'unprecedented' €130 billion of loans at very low rates to Irish banks.