COMMUNICATION TO THE COMMISSION Main terms of the EFSF financial assistance facility agreement with Ireland
Date: 2011-10-19
Institutions: European Commission
Subjects: Community loan, Ireland, deadline for payment, economic stabilisation, financial aid, financial intervention, interest, reflation, stability programme

EUROPEAN COMMISSION 

Brussels, 19.10.2011 
SEC(2011) 1272 final 

COMMUNICATION TO THE COMMISSION 

Main terms of the EFSF financial assistance facility agreement with Ireland 

 
 
 
 
  
 
COMMUNICATION TO THE COMMISSION 

Main terms of the EFSF financial assistance facility agreement with Ireland 

The  euro  area  Member  States  agreed  in  May  2010  to  create  a  European  Financial  Stability 
Facility (EFSF) in order to financially support euro area Member States in difficulties caused 
by  exceptional  circumstances  beyond  their  control.  The  EFSF  was  incorporated  on  7  June 
2010 for the purpose of making stability support to euro area Member States. 

By a decision of the representatives of the governments of the 16 euro area Member States of 
7 June 2010 the Commission was tasked with carrying out duties and functions, including i.a. 
providing  proposals  to  the  euro  area  Member  States  on  the  loan  facility  agreement  to  be 
signed with the beneficiary Member State(s). 

The  EFSF  Framework  Agreement  was  signed  in  June  2010.  Amendments  to  the  EFSF 
Framework  Agreement  were  signed  in  September  2011  but  have  not  yet  entered  into  force. 
The EFSF Framework Agreement refers to certain tasks of the Commission in line with the 
decision  of  the  representatives  of  the  governments  of  the  16  euro  area  Member  States  of  7 
June 2010. 

On 21 November 2010, Ireland requested financial assistance. 

On  28  November  2010,  the  Eurogroup  and  the  ECOFIN  Ministers  unanimously  decided  to 
grant  financial  assistance  in  response  to  the  Irish  authorities'  request.  A  Loan  Facility 
Agreement was signed with Ireland on 22 December 2010. 

Following the Amendments to the EFSF Framework Agreement, a new Financial Assistance 
Facility Agreement should be proposed to Ireland. 

According  to  the  EFSF  Framework  Agreement  the  Commission,  in  liaison  with  the  ECB, 
shall  make  a  proposal  to  the  Eurogroup  Working  Group  of  the  main  terms  of  the  Financial 
Assistance Facility Agreement to be proposed to Ireland, based on its assessment of market 
conditions. 

The main terms of the EFSF Financial Assistance Facility Agreement shall be: 

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6. 

The  EFSF  shall  make  available  to  Ireland  a  net  loan  disbursement  amount  of 
maximum EUR 3 billion, with a maximum maturity of 15 years.  

The financial assistance shall be made available until 15 November 2011.  

The EFSF financial assistance shall be made available to Ireland in one instalment. 
The instalment may be disbursed in one or several tranches.  

Ireland shall pay the actual cost of funding of the EFSF for each tranche. 

Interest will be charged annually and principal will be repaid in fine (bullet loan). 

An upfront service fee of 50 basis points shall be charged to Ireland. After 7 years, 
an annual service fee of 7 basis points shall be charged to Ireland. 

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The Commission is invited in line with the tasks assigned to it by the euro area Member States 
referred  to  above  to  agree  that  the  proposal  is  submitted  to  the  Eurogroup  Working  Group 
after  the  entry  into  force  of  the  Amendments  to  the  EFSF  Framework  Agreement  signed  in 
September 2011. 

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