Proposal for a COUNCIL IMPLEMENTING DECISION amending Implementing Decision 2011/77/EU on granting Union financial assistance to Ireland
Date: 2012-12-19
Institutions: European Commission
Subjects: Community loan, EU aid, Ireland, aid for restructuring, banking system, debt reduction, economic stabilisation, financial aid, macroeconomics, reflation

EUROPEAN 
COMMISSION 

Brussels, 19.12.2012  
COM(2012) 792 final 

2012/0367 (NLE) 

Proposal for a 

COUNCIL IMPLEMENTING DECISION 

amending Implementing Decision 2011/77/EU on granting Union financial assistance to 
Ireland 

{SWD(2012) 456 final} 

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EXPLANATORY MEMORANDUM 

Upon a request by Ireland, the Council granted financial assistance to Ireland on 7 December 
2010  (Implementing  Decision  2011/77/EU)  in  support  of  a  strong  economic  and  financial 
reform  programme  aiming  at  restoring  confidence,  enabling  the  return  of  the  economy  to 
sustainable growth, and safeguarding financial stability in Ireland, the euro area and the EU. 

In line with Article 3(9) of Decision 2011/77/EU, the Commission, together with the IMF and 
in liaison with the ECB, has conducted the eighth review of the Irish authorities' progress on 
the implementation of the agreed measures as well as of the effectiveness and economic and 
social impact of the agreed measures.  

Taking  into  account  the  revised  economic  outlook,  as  well  as  intervened  information,  the 
Commission proposes to modify the economic policy conditions underpinning the assistance 
as  explained  below.  The  Commission  views  the  proposed  changes  to  the  economic  policy 
conditions  as  necessary  to  ensure  the  smooth  implementation  of  the  programme  and  secure 
the programme's objectives. 

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2012/0367 (NLE) 

Proposal for a 

COUNCIL IMPLEMENTING DECISION 

amending Implementing Decision 2011/77/EU on granting Union financial assistance to 
Ireland 

THE COUNCIL OF THE EUROPEAN UNION, 

Having regard to the Treaty on the Functioning of the European Union,  

Having  regard  to  Council  Regulation  (EU)  No  407/2010  of  11  May  2010  establishing  a 
European financial stabilisation mechanism1, and in particular Article 3(2) thereof, 

Having regard to the proposal from the European Commission, 

Whereas: 

(1) 

(2) 

(3) 

(4) 

Upon a request by Ireland, the Council granted financial assistance to it (Implementing 
Decision  2011/77/EU2)  in  support  of  a  strong  economic  and  financial  reform 
programme  aiming  at  restoring  confidence,  enabling  the  return  of  the  economy  to 
sustainable  growth,  and  safeguarding  financial  stability  in  Ireland,  the  euro  area  and 
the Union. 

In  line  with  Article  3(9)  of  Implementing  Decision  2011/77/EU,  the  Commission, 
together with the International Monetary Fund (IMF) and in liaison with the European 
Central Bank (ECB), has conducted the eigth review of the Irish authorities' progress 
on  the  implementation  of  the  agreed  measures  as  well  as  of  the  effectiveness  and 
economic and social impact of the agreed measures. 

Significant  progress  has  been  achieved  towards  the  programme's  bank  deleveraging 
objectives.  Specifically,  two  domestic  banks  have  either  already  met  or  are  well 
advanced  towards  meeting  the  122.5%  loan-to-deposit  ratio  (LDR)  target,  originally 
envisaged to be met by end 2013. The remaining domestic bank has completed some 
non-core  asset  disposals  and  its  programme  deleveraging  requirements  will  be 
reassessed following a decision on its restructuring plan by the European Commission.  

Considering  the  substantial  progress,  a  modification  of  the  programme's  monitoring 
framework  for  banks'  deleveraging  towards  nominal  non-core  asset  disposal  targets 
and  advanced  monitoring  designed  to  ensure  that  banks  improve  their  net  stable 
funding ratios (NSFRs) and their liquidity coverage ratios (LCRs) would contribute to 
avoiding  any  undue  distortion  in  banks'  deposit  pricing  and  prepare  them  for 
compliance with Basel III liquidity requirements. 

1 
2 

OJ L 118, 12.5.2010, p. 1. 
OJ L 30, 4.2.2011, p. 34. 

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(5) 

light  of 

In 
2011/77/EU should be amended, 

these  developments  and  considerations,  Implementing  Decision 

HAS ADOPTED THIS DECISION:  

Article 1 

Article 3 of Implementing Decision 2011/77/EU is amended as follows: 

(1) in paragraph 8, point (c) is replaced by the following: 

"(c) the deleveraging of the domestic banks towards the nominal targets for non-core 
asset disposals and amortisation established under the 2011 PLAR, unless otherwise 
agreed  with  the  European  Commission  in  the  context  of  ongoing  assessments  of 
banks' restructuring plans, and the monitoring of banks' progress towards the relevant 
Basel III liquidity and net-stable-funding ratio requirements in line with the advanced 
monitoring framework agreed under the programme."; 

(2) paragraph 10 is replaced by the following: 

"10.  Ireland  shall  adopt  the  following  measures  during  2013,  in  line  with 
specifications in the Memorandum of Understanding: 

(a) The completion of bank stress tests, aligned to the EBA exercise, building on the 
outcomes from PCAR 2011 and the Financial Measures Programme 2012. The stress 
test  shall  be  rigorous  and  continue  to  be  based  on  robust  loan-loss  forecasts  and  a 
high  level  of  transparency.  The  publication  of  the  results  shall  be  aligned  with  the 
timing of the next EBA exercise. 

(b) the deleveraging of the domestic banks towards the end-2013 nominal targets for 
non-core asset disposals and amortisation established under the 2011 PLAR, unless 
otherwise  agreed  with  the  European  Commission  in  the  context  of  ongoing 
assessments  of  banks'  restructuring  plans,  and  the  monitoring  of  banks'  progress 
towards the relevant Basel III liquidity and net-stable-funding ratio requirements in 
line with the advanced monitoring framework agreed under the programme.". 

This Decision is addressed to Ireland.  

Article 2 

Article 3 

This Decision shall be published in the Official Journal of the European Union.  

Done at Brussels,  

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For the Council 
The President 

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