merrion street

The Minister for Finance, Mr. Michael Noonan, T.D., today announced that, following a Government Decision, he was extending the Eligible Liabilities Guarantee Scheme for a further period of one year to 31 December, 2012.

On the advice of the Governor of the Central Bank, the Minister proposes to extend the issuance period of the Scheme beyond the current date of 31 December 2011, and will be placing a Statutory Instrument before the Houses of the Oireachtas shortly which will enable this issuance period to extend to 31 December 2012.

This extension will, as normal, be subject to EU state aid approval every six months – which is the maximum period permitted for such approval under the European Commission’s policy on guarantee schemes in the financial sector. The initial approval covering the period up until 30 June, 2012, is expected to be given for the extension by the Commission in due course. As is customary, the Department of Finance has consulted with the European Central Bank on this measure and has obtained an opinion which inter alia states that ‘Taking into account financial stability considerations, a further extension of the ELG Scheme would be beneficial’.

The extension of the Scheme means that the existing State guarantee will continue to be available for both eligible short- and long-term liabilities, including retail deposits, until 31 December, 2012.

The continuation of the Scheme is an important support to the Irish Banking system and complements the steps that have already been taken to help restore it to a sound footing.