European Commission releases €1bn to Ireland following review

The European Commission has cleared the release of €1bn to Ireland as part of the EU/IMF/ECB bailout loan programme following its seventh review.

This brings total bailout loans from the Commission to Ireland to €36.6bn and an additional €700m is also being loaned by Britain, Denmark and Sweden.

According to the review, while Ireland has made much progress with market sentiment improving towards the country all the time, “significant” challenges remain including the large fiscal deficit, long-term unemployment and high private sector debt.

“The working paper acknowledges that the programme’s ultimate success remains subject to important risks, including continued uncertainties in the outlook for trading partners’ growth – and the impact of these uncertainties on the fiscal path – and the complexity of the ongoing financial sector reforms in a context of strong sovereign-banking links,” according to the report.

The fiscal deficit for 2012 is projected to be within the programme ceiling of 8.6pc, continued progress is being made in repairing the country’s banking system so that it can support the economy, and important structural reforms are being implemented.

The release comes as the Government continues its bid to get a reduction on its €64bn bank debt mountain.

Last week Finance Minister Michael Noonan met with fellow European Ministers in Cyprus where the issue of the debt was discussed but a deal is not expected imminently.