CELEX: 52011PC0745
Language: en
Date: 2011-11-11
Title: Proposal for a COUNCIL IMPLEMENTING DECISION amending Implementing Decision 2011/77/EU on granting Union financial assistance to Ireland

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		52011PC0745
		
			Proposal for a COUNCIL IMPLEMENTING DECISION amending Implementing Decision 2011/77/EU on granting Union financial assistance to Ireland /* COM/2011/0745 final - 2011/0335 (NLE) */
			
				
		
		
			
			   	EXPLANATORY MEMORANDUM
Upon a request by Ireland, the Council
granted financial assistance to Ireland on 7 December 2010 (Council 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 fourth 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.
2011/0335 (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
mechanism[1], and in particular Article 3(2) thereof,
Having regard to the proposal from the
European Commission,
Whereas:
(1)              
Upon a request by Ireland, the Council granted
financial assistance to it (Implementing Decision
2011/77/EU[2])
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.
(2)              
In line with Article 3(9) of Implementing
Decision 2011/77/EU, the Commission, together with the IMF and in liaison with
the European Central Bank (ECB), has conducted the fourth 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.
(3)              
Bank of Ireland's remaining outstanding capital
requirement has decreased from EUR 500 million to EUR 350 million due to
further liability management exercises and gains from closing
out of hedging contracts attached to the subordinated debt instruments.
(4)              
The Irish authorities have requested moving
until the end of the second quarter of 2012 the deadline to prepare the
legislation to strengthen the regulatory framework for the credit unions sector
to enable thorough consultation of stakeholders. In the meantime the
authorities will address the weaknesses in the most troubled credit unions
while protecting deposits to ensure financial stability.
(5)              
The Irish authorities have requested moving
until the end of the first quarter of 2012 the deadline to prepare the
envisaged fiscal responsibility legislation, which will give enactment to the
recent enhancements of the Stability and Growth Pact, to enable thorough
discussion with stakeholders.
(6)              
In light of these developments and
considerations, Implementing Decision 2011/77/EU should be amended.
HAS ADOPTED THIS DECISION: 
Article 1
Article 3 of Implementing
Decision 2011/77/EU is amended as follows:
(1) in paragraph 7, point (g) is replaced
by the following:
"(g) the
recapitalisation of the domestic banks by end July 2011 (subject to appropriate
adjustment for expected asset sales and liability management exercises in the
cases of Irish Life & Permanent and Bank of Ireland) in line with the
findings of the 2011 Prudential Liquidity Assessment Review (PLAR) and
Prudential Capital Assessment Review (PCAR), as announced by the Central Bank
of Ireland on 31 March 2011. To allow further burden sharing, the final EUR 0,35
billion step in recapitalising Bank of Ireland shall be completed by end 2011
and any further recapitalisation of Irish Life & Permanent shall be
completed following the disposal of the insurance arm.”
(2) in paragraph 7, points (e) and (p) are
deleted.
(3) in paragraph 8, the following points are
added:
"(d) the submission
of legislation to the Oireachtas to assist the credit unions with a
strengthened regulatory framework including more effective governance and
regulatory requirements.
(e) the adoption of measures reinforcing a
credible budgetary strategy and strengthening the budgetary framework. Ireland shall adopt and implement the fiscal rule
that any additional unplanned revenues in 2011-2015 will be allocated to
deficit and debt reduction. Ireland shall introduce a Fiscal Responsibility
Bill including provisions for a medium-term budgetary framework with binding
multi-annual ceilings on expenditure in each area, fiscal rules and assure the
Fiscal Advisory Council’s independence. This shall be made taking into account the
revised economic governance reforms at Union level and build on reforms already
in place.”
Article 2
This Decision
is addressed to Ireland. 
Article 3
This Decision
shall be published in the Official Journal of the European Union. 
Done at Brussels, 
                                                                       For
the Council
                                                                       The
President
[1]               OJ L 118, 12.5.2010, p. 1.
[2]               OJ L 30, 4.2.2011, p. 34.