Opinion of the European Central Bank of 29 November 2012 on the extension of the Irish state guarantee of eligible liabilities of credit institutions (CON/2012/98)
Date: 2012-11-29
Institutions: European Central Bank
Subjects: Ireland, State aid, credit institution, financial stability, guarantee, national law

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 29 November 2012 

on the extension of the Irish state guarantee of eligible liabilities of credit institutions 

(CON/2012/98) 

Introduction and legal basis 

On 19 November 2012, the European Central Bank (ECB) received a request from the Irish Minister for 

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

Guarantee) (Amendment) Scheme 2012 (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  came  into  effect  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,  CON/2010/71,  CON/2010/75  and  CON/2011/88  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, the effect of which will be that eligible liabilities, as defined in the ELG Scheme, may 

be issued until 31 December 2013. 

2. 

The appropriate time to consult the ECB 

The ECB notes that the Minister has requested the ECB to provide its opinion as soon as possible 

in  order  to  ensure  that  European  Union  state  aid  approval  for  the  draft  scheme  can  be  obtained 

quickly and the draft scheme presented for parliamentary approval. The ECB reiterates its position, 

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2  

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

 
 
 
 
 
                                                 
ECB-PUBLIC 

expressed in previous opinions3, on the importance of a consultation taking 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, 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. 

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 2012 to 31 December 2013. 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 its approval process as regards such state aid. 

3.2  The ECB reiterates the views expressed in its previous opinions on the subject of the ELG Scheme 
and  the  Irish  legislation  on  financial  support  to  credit  institutions4.  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.  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 advance6. 

3.3  Taking  into  account  financial  stability  considerations,  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-

International Monetary Fund Programme of Financial Support for Ireland. 

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

Done at Frankfurt am Main, 29 November 2012. 

[signed] 

The President of the ECB 

Mario DRAGHI 

3  
4 
5  
6  

See Opinion CON 2011/88. 
See Opinion CON/2011/88. 
See Opinion CON/2009/73. 
See  the  DG  Competition  staff  working  document  of  30  April  2010,  ‘The  application  of  State  aid  rules  to  government 
guarantee schemes covering bank debt to be issued after 30 June 2011’, available on the European Commission’s website 
at www.ec.europa.eu. 

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