EN 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 16 September 2010 
on the extension of the Irish State guarantee of certain liabilities of credit institutions 
(CON/2010/71) 
 
Introduction and legal basis  
On 10 September 2010 the European Central Bank (ECB) received a request from the Irish Minister for 
Finance (hereinafter the ‘Minister’) for an opini on on a draft Credit Institutions (Eligible Liabilities 
Guarantee) (Amendment) Scheme 2010 (hereinafter th e ‘draft scheme’) amending the Credit Institutions 
(Eligible Liabilities Guarantee) Scheme 2009  (hereinafter the ‘ELG Scheme’).  
The ECB’s competence to deliver an  opinion is based on Articles 127(4) and 282(5) of the Treaty on the 
Functioning of the European Union and the sixth indent  of Article 2(1) of Council Decision 98/415/EC of 
29 June 1998 on the consultation of the European Ce ntral Bank by national authorities regarding draft 
legislative provisions1, as the draft scheme relates to rules applic able to financial institutions insofar as 
they materially influence the stability of financial institutions and markets. In  accordance with the first 
sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council 
has adopted this opinion. 
 1.  Purpose of the draft scheme  
The ELG Scheme was signed into law on 9 Decemb er 2009. The ECB was consulted on the ELG Scheme 
at the draft stage and adopted its Opinion CON/2009/56
2. Subsequently the ECB adopted its Opinion 
CON/2009/92 on proposed amendments to the ELG Scheme. 
The Irish Government now proposes a prolongation of the validity of the ELG Scheme by three months, 
i.e. that eligible liabilities may be issued until 31  December 2010 together with some minor technical 
changes. 
 2. The appropriate time to consult the ECB  
2.1 The ECB notes that the Minister has request ed that the ECB provides its opinion as soon as 
possible in order to ensure th at Union State aid approval for the draft scheme can be obtained 
                                                 
1  OJ L 189, 3.7.1998, p. 42.  
2  All ECB opinions are published on the ECB’s website at www.ecb.europa.eu. 
2 quickly and the draft scheme presented for parlia mentary approval. The ECB points out that, in 
cases of particular urgency which do not allow for a normal consultation period, the consulting 
authority may indicate the urgency in the consulta tion request and ask for a shorter deadline for the 
ECB’s opinion to be adopted. This does not prejudice the consulting authority’s duty under 
Articles 127(4) and 282(5) of the Treaty to consult the ECB on national draft legislative provisions 
falling within its fields of competence in due c ourse of the national legislative process. The second 
sentence of Article 4 of Decision 98/415/EC provides that the ECB must be consulted ‘at an appropriate stage’ in the legislative process. This  implies that the consultation should take place at 
a point in the legislative process which affords the ECB sufficient time to examine the draft 
legislative provisions and to adopt its opinion in  all required language ve rsions, and which also 
enables the relevant national authorities to take the ECB’s opinion into consideration before the 
provisions are adopted. Article 3(4) of Decision 98/415/EC also obliges Member States to suspend the adoption process for draft legislative provisions, pending receipt of the ECB’s opinion.  
2.2 The ECB would appreciate the Department of Fi nance giving due consideration to honouring their 
obligation to consult the ECB in the futu re, in accordance with Decision 98/415/EC. 
 3. General observations  
3.1 The purpose of the draft scheme is the extension of the issuance period under the ELG Scheme 
from 29 September 2010 to 31 December 2010. The Minister in his request for an opinion advises that increased pricing will apply to liab ilities issued under the draft scheme after 
29 September 2010, the precise quantum of which is  to be determined in conjunction with the 
European Commission. The ECB notes that it has not been requested to consider the pricing 
modalities for the purposes of this Opinion. The Minister also states that a positive assessment by 
the ECB on financial stability grounds of the requi rement for a prolongation of the guarantee of 
short term and interbank liabilities is consider ed essential by the European Commission to the 
Commission’s approval process.  
3.2 The ECB reiterates the views expressed in previous opinions
3. In particular, it recalls that 
coordination of the duration of national financia l support schemes across the Union is of crucial 
importance in order to ensure a level playing field4.  
3.3 Taking into account financial stability considera tions, an extension of the ELG Scheme may be 
beneficial. 
   
                                                 
3 See Opinions CON/2008/44 and CON/2010/29. 
4 See Opinions CON/2009/24, paragraph 3.1, CON/2009/54,  paragraph 2.5.2 and CON/2009/73, paragraph 3.2. 
3 This opinion will be published on the ECB’s website. 
  Done at Frankfurt am Main, 16 September 2010. 
 
[signed] 
 
The Vice-President of the ECB 
Vítor CONSTÂNCIO