EN ECB-PUBLIC 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 7 November 2011 
on the extension of the Irish State guarantee of eligible liabilities of credit institutions 
(CON/2011/88) 
 
Introduction and legal basis  
On 7 October 2011, the European Central Bank (ECB)  received a request from the Irish Minister for 
Finance for an opinion on a draft Credit Institu tions (Eligible Liabilities Guarantee) (Amendment) 
Scheme 2011 (hereinafter the ‘draft scheme’) am ending 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 revised draft scheme 1.1 The ELG Scheme was signed into law on 9 D ecember 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 
Opinions CON/2009/92, CON/2010/71 and CON/ 2010/75 on proposed amendments to the ELG 
Scheme. 
1.2 The Irish Government now proposes a further prol ongation of the validity of the ELG Scheme by 
12 months, i.e. that eligible liabilities may be issued until 31 December 2012. 
 
                                                 
1  OJ L 189, 3.7.1998, p. 42.  
2  All ECB opinions are published on th e ECB’s website at www.ecb.europa.eu. 
ECB-PUBLIC  
2 2. The appropriate time to consult the ECB 
The ECB notes that the Minister has requested the EC B to provide its opinion as soon as possible in order 
to ensure that Union State aid approval for the draf t scheme can be obtained quickly and the draft scheme 
presented for parliamentary approval. The ECB reiter ates its position as expressed in previous opinions3 
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 
versions, and which also enables the relevant nati onal authorities to take the ECB’s opinion into 
consideration before the provisions are adopted. Artic le 3(4) of Decision 98/415/EC also obliges Member 
States to suspend the adoption process for draft legi slative provisions, pending receipt of the ECB’s 
opinion. The ECB would appreciate the Department of  Finance giving due consideration to honouring 
their obligation to consult the ECB in the future, in accordance with Decision 98/415/EC. 
 3. The draft scheme 3.1 The purpose of the draft scheme is the extens ion of the issuance period under the ELG Scheme 
from 31 December 2011 to 31 December 2012. The Minister in his request for an opinion advises that a positive assessment by the ECB on financia l stability grounds of the requirement for a 
prolongation of the guarantee of short term and interbank liabiliti es is considered  essential by the 
European Commission to the Commission’s appr oval process as regards such state aid.   
3.2 The ECB reiterates the views expressed in its pr evious opinions on the subject of the ELG Scheme 
and the Irish legislation on financial support to credit institutions
4. 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 field5. The ECB also notes that it is the European 
Commission’s practice to approve Member States’ guarantee schemes for no longer than six months in advance
6. 
3.3 Taking into account financial stability consider ations, a further extension of the ELG Scheme 
would be beneficial. Moreover, the ECB understands  that the extension of the ELG Scheme is 
safeguarded by the timely compliance of the Irish  government with the ongoing European Union 
and International Monetary Fund (IMF) Progr amme for financial assistance to Ireland. 
 
                                                 
3  See Opinion CON 2010/75, CON/2010/71, paragraph 2, CON/ 2010/50, paragraph 2 and CON/2010/36, paragraph 2.1. 
4 See Opinions CON/2010/75, CON/ 2010/71, CON/2010/29 and CON/2008/44. 
5  See Opinions CON/2009/24, paragraph 3.1, CON/2009/ 54, paragraph 2.5.2 and CON/2009/73, paragraph 3.2. 
6  See the Directorate General Competition staff working document of 30 April 2010, ‘The application of State aid rules to 
government guarantee sc hemes covering bank debt to be issued af ter 30 June 2011’, available on the European 
Commission’s website at www.ec.europa.eu.  
ECB-PUBLIC  
3 This opinion will be published on the ECB’s website. 
  Done at Frankfurt am Main, 7 November 2011. 
 
[signed] 
 
The President of the ECB 
Mario DRAGHI