Opinion of the European Central Bank of 2 November 2010 on the extension of the Irish State guarantee of certain liabilities of credit institutions (CON/2010/75)
Date: 2010-11-02
Institutions: European Central Bank
Subjects: Ireland, State aid, credit institution, financial stability, guarantee, national law

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 2 November 2010 

on the extension of the Irish State guarantee of certain liabilities of credit institutions 

(CON/2010/75) 

Introduction and legal basis 

On  28  October  2010  the  European  Central  Bank  (ECB)  received  a  request  from  the  Irish  Minister  for 

Finance  (hereinafter  the  ‘Minister’)  for  an  opinion  on  a  draft  Credit  Institutions  (Eligible  Liabilities 

Guarantee)  (Amendment)  (No  2)  Scheme  2010  (hereinafter  the  ‘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  Central  Bank  by  national  authorities  regarding  draft 
legislative  provisions1,  as  the  draft  scheme  relates  to  rules  applicable  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 December 2009. The ECB was consulted on the ELG 
Scheme at the draft stage and adopted its Opinion CON/2009/562. Subsequently the ECB adopted 

Opinions CON/2009/92 and CON/2010/71 on proposed amendments to the ELG Scheme. 

1.2  The Irish Government now proposes a further prolongation of the validity of the ELG Scheme by 

12 months, i.e. that eligible liabilities may be issued until 31 December 2011 together with some 

minor technical changes. 

2. 

The appropriate time to consult the ECB 

The ECB notes that the Minister for Finance has requested that the ECB provides its opinion as soon as 

possible in order to ensure that Union State aid approval for the draft scheme can be obtained quickly and 

1  
2  

OJ L 189, 3.7.1998, p. 42.  
All ECB opinions are published on the ECB’s website at www.ecb.europa.eu. 

 
 
 
 
 
                                                 
the  draft  scheme  presented  for  parliamentary  approval.  The  ECB  reiterates  its  view  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  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.  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  extension  of  the  issuance  period  under  the  ELG  Scheme 

from 31 December 2010 to 31 December 2011. The Minister in his request for an opinion advises 

that  a  positive  assessment  by  the  ECB  on  financial  stability  grounds  of  the  requirement  for  a 

prolongation of the guarantee of short term and interbank liabilities is considered essential by the 

European Commission to the Commission’s approval process.   

3.2  The  ECB  reiterates  the  views  expressed  in  previous  opinions4.  In  particular,  it  recalls  that 

coordination  of  the  duration  of  national  financial  support  schemes  across  the  Union  is  of  crucial 
importance in order to ensure a level playing field5.  

3.3  Taking  into  account  financial  stability  considerations,  an  extension  of  the  ELG  Scheme  may  be 

beneficial.  

This opinion will be published on the ECB’s website. 

Done at Frankfurt am Main, 2 November 2010. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

3  
4 
5  

See Opinion CON/2010/71, paragraph 2, CON/2010/50, paragraph 2 and CON/2010/36, paragraph 2.1. 
See Opinions CON/2010/71, CON/2010/29 and CON/2008/44. 
See Opinions CON/2009/24, paragraph 3.1, CON/2009/54, paragraph 2.5.2 and CON/2009/73, paragraph 3.2. 

2