* Dublin to pay back bailout loans until 2042
* European Commission will monitor Ireland's progress
BRUSSELS, June 23 There is a very low risk that
Ireland will not pay back its bailout loans but Dublin must
maintain budget discipline to reduce its large public debt, the
European Commission said.
Ireland borrowed 67.5 billion euros ($92 billion) from the
European Union and the International Monetary Fund to keep
itself financed after being cut off from markets in 2010 because
of bloated public finances caused by a banking sector crisis.
Dublin is scheduled to pay back the loans gradually until
2042. Until three quarters of the money is paid back, the
European Commission will check twice a year how the Irish
economy is doing and the country's ability to repay the debt.
"Repayment risks ... are very low at present. This assumes
that the authorities continue to implement agreed policy plans
and access to credit markets is maintained," the Commission said
in a report after the first such check.
It noted that if Ireland implements fiscal plans detailed in
its Stability and Convergence Programme (SCP), its public debt
will fall to about 90 percent of gross domestic product by 2024
thanks to a primary surplus of close to 3 percent from 2018.
If it does not, public debt will rise to 128 percent of GDP
in 2020 from around 124 percent in 2013 and stabilise at that
"The relatively large gap between the no-policy change
scenarios and the SCP scenario highlights the importance of
maintaining continued fiscal discipline for debt sustainability
going forward," the report said.
"Ireland needs to continue with fiscal consolidation, reduce
the private sector debt overhang, and further progress financial
sector repair to safeguard and strengthen the momentum of the
economic recovery," the report said.
($1 = 0.7366 Euros)
(Reporting by Jan Strupczewski; editing by Robin Emmott)