IMF to endorse Irish fiscal, banking plan -paper

DUBLIN, June 24 (Reuters) - The International Monetary Fund will commend Ireland's measures to cut its budget deficit and rescue banks but it will tell the government to control spending, the Irish Independent newspaper reported on Wednesday.

The IMF report, which the paper said would be published later on Wednesday, will applaud the speed and scale of the government's response to the crisis, the Irish Independent said.

Prime Minister Brian Cowen has forecast the budget deficit will exceed 10 percent of gross domestic product this year even after a series of tax rises and spending cuts unveiled in two emergency budgets in October and April.

The paper said the IMF would in particular endorse Ireland's bank guarantee scheme and its plans to set up a National Asset Management Agency (NAMA) to take over up to 90 billion euros ($125 billion) of risky assets from Irish banks.

"The IMF agrees NAMA can be self-financing," it added.

The lower house of Ireland's parliament approved legislation late on Tuesday that will enable the government to extend the bank guarantee scheme from its current two-year time span until Sept. 2010 to five years.

(Reporting by Andras Gergely; Editing by Tomasz Janowski)