Commission temporarily clears support for Anglo Irish Bank, Irish Nationwide Building Society and Allied Irish Bank
21 December 2010
The Commission has authorised under EU state aid rules emergency measures for three Irish banks. For Anglo Irish Bank, the Commission has approved a recapitalisation of up to €4.946 billion and a guarantee covering certain off-balance sheet transactions.
The Commission has also approved a recapitalisation of €2.7 billion of Irish Nationwide Building Society (INBS). Finally, the Commission has endorsed a recapitalisation of Allied Irish Bank covering its capital requirements to the end of 2010 and the capital requirements following from the Programme for Support agreed between the Irish authorities, the IMF and the EU. The Commission's approval of these emergency measures to help to preserve financial stability in Ireland does not prejudge future decisions on restructuring (for Allied Irish Bank) or on orderly resolution (for Anglo Irish and INBS). With regard to Allied Irish Bank, the final decision will depend on the Commission being satisfied that the bank will be commercially viable in the long term without further injections of taxpayers' money, that there is a significant contribution by the bank's shareholders and subordinated debt holders to the restructuring costs and that the bank will reduce its activities to offset the distortion of competition caused by the aid.
Commission Vice-President for Competition Joaquín Almunia said: "There is no doubt that the Irish banking sector is experiencing profound difficulties at the moment. I welcome the Programme for Support that has been put in place for Ireland by the EU and the IMF as it will ensure that action will be taken to deal with the problems of the Irish banking sector. However, I would like to stress that the Commission will continue to apply the EU State aid rules to the aid provided to the Irish banks. The measures approved by the Commission today for Anglo Irish Bank, INBS and Allied Irish Bank are necessary to ensure that these institutions meet their respective obligations and will help to preserve financial stability in Ireland. Both Anglo Irish Bank and INBS will have to submit a plan dealing with their resolution in early 2011, while Allied Irish Bank will have to submit a revised restructuring plan."
© European Commission
