# EUR-Lex - 52012PC0792 - EN

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# 52012PC0792

**Proposal for a COUNCIL IMPLEMENTING DECISION amending Implementing Decision 2011/77/EU on granting Union financial assistance to Ireland /* COM/2012/0792 final - 2012/0367 (NLE) */**

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EXPLANATORY MEMORANDUM

Upon a request by Ireland, the Council
granted financial assistance to Ireland on 7 December 2010 (Implementing Decision 2011/77/EU) in support
of a strong economic and financial reform programme aiming at restoring confidence, enabling the return of the economy to
sustainable growth, and safeguarding financial stability in Ireland, the euro
area and the EU.

In line with Article 3(9) of Decision
2011/77/EU, the Commission, together with the IMF and in liaison with the ECB,
has conducted the eighth review of the Irish authorities' progress on the
implementation of the agreed measures as well as of the effectiveness and
economic and social impact of the agreed measures.

Taking into account the revised economic
outlook, as well as intervened information, the Commission proposes to modify
the economic policy conditions underpinning the assistance as explained below.
The Commission views the proposed changes to the economic policy conditions as
necessary to ensure the smooth implementation of the programme and secure the
programme's objectives.

2012/0367 (NLE)

Proposal for a

COUNCIL IMPLEMENTING DECISION

amending Implementing Decision 2011/77/EU
on granting Union financial assistance to Ireland

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty on the
Functioning of the European Union,

Having regard to Council Regulation (EU) No
407/2010 of 11 May 2010 establishing a European financial stabilisation
mechanism[1], and in particular Article 3(2) thereof,

Having regard to the proposal from the
European Commission,

Whereas:

(1)       Upon
a request by Ireland, the Council granted financial assistance to it (Implementing Decision 2011/77/EU[2])
in support of a strong economic and financial reform
programme aiming at restoring confidence, enabling the
return of the economy to sustainable growth, and safeguarding financial
stability in Ireland, the euro area and the Union.

(2)       In line with Article 3(9)
of Implementing Decision 2011/77/EU, the Commission, together with the International
Monetary Fund (IMF) and in liaison with the European Central Bank (ECB), has
conducted the eigth review of the Irish authorities' progress on the
implementation of the agreed measures as well as of the effectiveness and
economic and social impact of the agreed measures.

(3)       Significant progress has
been achieved towards the programme's bank deleveraging objectives.
Specifically, two domestic banks have either already met or are well advanced
towards meeting the 122.5% loan-to-deposit ratio (LDR) target, originally envisaged
to be met by end 2013. The remaining domestic bank has completed some non-core
asset disposals and its programme deleveraging requirements will be reassessed
following a decision on its restructuring plan by the European Commission.

(4)       Considering the
substantial progress, a modification of the programme's monitoring framework
for banks' deleveraging towards nominal non-core asset disposal targets and
advanced monitoring designed to ensure that banks improve their net stable
funding ratios (NSFRs) and their liquidity coverage ratios (LCRs) would
contribute to avoiding any undue distortion in banks' deposit pricing and
prepare them for compliance with Basel III liquidity requirements.

(5)       In light of these
developments and considerations, Implementing Decision 2011/77/EU should be amended,

HAS ADOPTED THIS DECISION:

Article 1

Article 3 of Implementing
Decision 2011/77/EU is amended as follows:

(1) in paragraph 8, point (c) is replaced
by the following:

"(c) the deleveraging of the domestic
banks towards the nominal targets for non-core asset disposals and amortisation
established under the 2011 PLAR, unless otherwise agreed with the European
Commission in the context of ongoing assessments of banks' restructuring plans,
and the monitoring of banks' progress towards the relevant Basel III liquidity
and net-stable-funding ratio requirements in line with the advanced monitoring
framework agreed under the programme.";

(2) paragraph 10 is replaced by the
following:

"10. Ireland shall adopt the following measures
during 2013, in line with specifications in the Memorandum of Understanding:

(a) The completion of bank stress tests, aligned
to the EBA exercise, building on the outcomes from PCAR 2011 and the Financial
Measures Programme 2012. The stress test shall be rigorous and continue to be
based on robust loan-loss forecasts and a high level of transparency. The
publication of the results shall be aligned with the timing of the next EBA
exercise.

(b) the deleveraging of
the domestic banks towards the end-2013 nominal targets for non-core asset
disposals and amortisation established under the 2011 PLAR, unless otherwise
agreed with the European Commission in the context of ongoing assessments of
banks' restructuring plans, and the monitoring of banks' progress towards the
relevant Basel III liquidity and net-stable-funding ratio requirements in line
with the advanced monitoring framework agreed under the programme.".

Article 2

This Decision
is addressed to Ireland.

Article 3

This Decision shall be published in the Official Journal of the
European Union.

Done at Brussels,

For
the Council

The
President

[1]               OJ L 118, 12.5.2010, p. 1.

[2]               OJ L 30, 4.2.2011, p. 34.