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2.6.2011 Official
Journal
of
the
European
Union L
147/17
DECISIONS
COUNCIL IMPLEMENTING DECISION
of 30 May 2011
amending Implementing Decision 2011/77/EU on granting Union financial assistance to Ireland
(2011/326/EU)
THE COUNCIL OF THE EUROPEAN UNION,
path for the debt-to-GDP ratio of 96,2 % in 2010,
112,0 % in 2011, 117,9 % in 2012 and 120,3 % in
2013. The debt-to-GDP ratio would therefore be
stabilised in 2013 and be placed on a declining path
Having regard to the Treaty on the Functioning of the European
thereafter, assuming further progress in the reduction
Union,
of the deficit. Debt dynamics are affected by several
below-the-line operations, including capital injection
into banks in 2011 with net debt-increasing effect of
around 6 percentage points of GDP, an assumption to
Having regard to Council Regulation (EU) No 407/2010 of
maintain high cash reserves, and differences between
11 May 2010 establishing a European financial stabilisation
accrued and cash interest payments.
mechanism ( 1 ), and in particular Article 3(2) thereof,
(4) The
recapitalisation
of
Allied
Irish
Bank,
Bank
of
Ireland,
Having regard to the proposal from the European Commission,
and EBS Building Society to a 12 % core tier 1 capital
ratio (based on the 2010 Prudential Capital Assessment
Review (PCAR)), which was to be done by February
2011, was postponed by the outgoing government due
Whereas:
to the impending general elections.
(1) Upon
a
request
by
Ireland,
the
Council
granted
it (5) On
31
March
2011,
the
Central
Bank
of
Ireland
financial assistance (Implementing Decision
announced the results of the PCAR and the Prudential
2011/77/EU ( 2 )) in support of a strong economic and
Liquidity Assessment Review (PLAR). On the basis of
financial reform programme aiming at restoring
these assessments, the four participating domestic banks
confidence, enabling the return of the economy to
(Allied Irish Bank, Bank of Ireland, EBS Building Society
sustainable growth, and safeguarding financial stability
and Irish Life & Permanent) were found to need a total of
in Ireland, the euro area and the Union.
EUR 24 billion in additional capital, including contingent
capital of EUR 3 billion, to remain adequately capitalised
under a stress scenario.
(2) In
line
with
Article
3(9)
of
Implementing
Decision
2011/77/EU, the Commission, together with the Inter
national Monetary Fund (IMF) and in liaison with the
European Central Bank (ECB), has conducted the first
(6) On
31
March
2011
the
new
government,
which
was
review of the authorities’ progress on the implementation
formed following the elections held on 25 February
of the agreed measures as well as of the effectiveness and
2011, announced its strategy to strengthen and reform
economic and social impact of those measures.
the domestic banks, including by ensuring that the capi
talisation need identified by the PCAR/PLAR exercise be
met. This would bring domestic banks’ core tier 1 capital
ratio by end July 2011 (subject to appropriate adjustment
(3) Under
the
Commission’s
current
projections
for
nominal
for expected asset sales in the case of Irish Life &
GDP growth (– 3,6 % in 2010, 1,3 % in 2011, 2,8 % in
Permanent) well above the level that had been
2012 and 4,0 % in 2013), the fiscal adjustment path is
envisaged to be reached by February 2011.
broadly in line with the Council Recommendation of
7 December 2010 with a view to bringing to an end
the situation of an excessive deficit in Ireland, pursuant
to Article 126(7) of the Treaty, and is consistent with a
(7)
The Central Bank of Ireland should require Allied Irish
Bank, Bank of Ireland, EBS Building Society and Irish Life
( 1 ) OJ L 118, 12.5.2010, p. 1.
& Permanent to meet a target loan-to-deposit ratio (LDR)
( 2 ) OJ L 30, 4.2.2011, p. 34.
of 122,5 % by end-2013, while avoiding the fire sale

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L 147/18
EN
Official Journal of the European Union
2.6.2011
of assets. In addition, the Irish authorities should closely
allocated to deficit and debt reduction. Ireland
monitor the evolution of the Net Stable Funding ratio
shall establish a fiscal advisory council to provide
and the Liquidity Coverage ratio of the banks so as to
an independent assessment of the government’s
ensure convergence with the standards emerging within
budgetary position and forecasts. Ireland shall
the Basel III framework. The authorities should ensure
adopt a fiscal responsibility law introducing a
that targets are achieved by establishing a credible
medium-term expenditure framework with binding
framework for monitoring progress based on interim
multi-annual ceilings on expenditure in each area.
targets and appropriately incentivised governance
This shall be made taking into account any revised
arrangements within the banks.
economic governance reforms at Union level and
build on reforms already in place;’;
(8) Upon
taking
office,
the
new
government
launched
a
comprehensive review of expenditure to identify effi
ciency savings and to closely align the priorities under
(c) point (g) is replaced by the following:
pinning the fiscal consolidation to those for national
recovery set out in the Programme for Government
(2011-2016) announced on 7 March 2011.
‘(g) the recapitalisation of the domestic banks by end
July 2011 (subject to appropriate adjustment for
expected asset sales in the case of Irish Life &
(9) In
light
of
these
developments,
Implementing
Decision
Permanent) in line with the findings of the 2011
2011/77/EU should be amended,
PLAR and PCAR, as announced by the Central Bank
of Ireland on 31 March 2011;’;
HAS ADOPTED THIS DECISION:
(d) point (l) is replaced by the following:
Article 1
Article 3 of Implementing Decision 2011/77/EU is amended as
follows:
‘(l) enhancing competition in open markets. To this
end, legislation shall be reformed to generate more
credible deterrence by ensuring the availability of
(1) in paragraph 5, point (a) is replaced by the following:
effective sanctions for infringements of Irish
competition law and Articles 101 and 102 of the
Treaty as well as ensuring the effective functioning
‘(a) take action to ensure that domestic banks are
of the Competition Authority. In addition, for the
adequately capitalised in the form of equity, if needed,
duration of the programme, the authorities will
so as to ensure that they respect the minimum regu
ensure that no further exemptions to the
latory requirement of a 10,5 % core tier 1 capital ratio
competition law framework will be granted unless
for the entire duration of the EU financial assistance
they are entirely consistent with the goals of the
programme, while deleveraging towards the target
Union financial assistance programme and the
loan-to-deposits ratio of 122,5 % by end-2013;’;
needs of the economy;’;
(2) paragraph 7 is amended as follows:
(e) the following points are added:
(a) in point (b) the following sentence is added:
‘(n) the deleveraging of the domestic banks towards the
‘In consultation with the Commission, the IMF and the
target for loan-to-deposit ratios established under
ECB, Ireland may introduce budgetary changes to the
the 2011 PLAR;
above specified measures to fully realise efficiencies that
are to be identified by the ongoing Comprehensive
Review of Expenditure and the priorities of the
(o) the preparation of a plan to underpin the solvency
Programme for Government, consistent with the
and viability of undercapitalised institutions in the
overall objective of ensuring that the budget for 2012
credit union sector, including by granting the
yields a fiscal consolidation of at least EUR 3,6 billion;’;
Central Bank of Ireland the necessary powers to
promote a higher degree of consolidation of the
sector through mergers where appropriate, with
(b) point (e) is replaced by the following:
government financial support if warranted;
‘(e) the adoption of measures reinforcing a credible
budgetary strategy and strengthening the
(p) the submission of legislation to the Oireachtas to
budgetary framework. Ireland shall adopt and
assist the credit unions with a strengthened regu
implement the fiscal rule that any additional
latory framework including more effective
unplanned revenues in 2011-2015 will be
governance and regulatory requirements.’;

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EN
2.6.2011 Official
Journal
of
the
European
Union L
147/19
(3) paragraph 8 is amended as follows:
‘(c) the deleveraging of the domestic banks towards the
loan-to-deposit ratio targets established under the
2011 PLAR.’.
(a) in point (a), the following sentence is added:
Article 2
This Decision is addressed to Ireland.
‘In consultation with the European Commission, the
IMF and the ECB, Ireland may introduce budgetary
Article 3
changes to the above specified measures to fully
realise efficiencies that are to be identified by the
This Decision shall be published in the Official Journal of the
ongoing Comprehensive Review of Expenditure and
European Union.
the priorities of the Programme for Government,
consistent with the overall objective to ensure that the
budget for 2013 yields a fiscal consolidation of at least
Done at Brussels, 30 May 2011.
EUR 3,1 billion;’;
For the Council
The President
(b) the following point is added:
CSFALVAY Z.

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