Financial assistance to Ireland

 

SUMMARY OF:

Implementing Decision 2011/77/EU — EU financial assistance to Ireland

WHAT IS THE AIM OF THE DECISION?

It approved an economic adjustment programme for Ireland. This included a financial package of loans of up to €85 billion for 2010-2013 from a number of donors, including the European Union (EU).

KEY POINTS

• In December 2010, the EU agreed that Ireland required €85 billion in financial assistance between 2010 and 2013. The funding was provided by:
  • EU: €22.5 billion through the European financial stabilisation mechanism (EFSM) and €17.7 billion through the European Financial Stability Facility;
  • bilateral loans: €4.8 billion — from the UK (€3.8 billion), Sweden (€0.6 billion) and Denmark (€0.4 billion);
  • International Monetary Fund (IMF) : around €22.5 billion;
  • Ireland: €17.5 billion from its cash reserve and national pensions reserve fund.
• The financial agreement set out in the economic adjustment programme for Ireland required its government to:
  • strengthen and reform the banking sector;
  • restore fiscal sustainability and reduce the country’s deficit to below 3% of gross domestic product (GDP) by 2015;
  • implement labour market reforms to return to robust and sustainable growth.
• In December 2013, the assistance programme came to an end.
• Ireland is now subject to the EU’s post-programme surveillance (PPS). Under this, the European Commission, liaising with the European Central Bank:
  • carries out regular visits to the country to assess its economic, fiscal and financial health;
  • prepares half-yearly reports to monitor progress and determine whether further measures are needed.
• The surveillance will continue until Ireland has repaid at least 75% of the loans it received. Barring any early repayments, that requirement will be met by 2031.

FROM WHEN DOES THE DECISION APPLY?

It took effect on 10 December 2010.

BACKGROUND

• On 11 May 2010, the EU agreed to create a European financial stabilisation mechanism (Council Regulation (EU) No 407/2010). This enables the Commission to borrow on financial markets and lend the resulting funds to a beneficiary country requiring financial support.
• Ireland, faced with large external liabilities and severe economic strain, requested help from the EU and the IMF on 21 November 2010.
• The mechanism has been used to help Ireland, Portugal and Greece.
• For more information, see:
  • ‘The Economic Adjustment Programme for Ireland’ on the European Commission's website
  • ‘Post-Programme Surveillance for Ireland’ on the European Commission's website.

MAIN ACTS

Council Implementing Decision 2011/77/EU of 7 December 2010 on granting Union financial assistance to Ireland (OJ L 30, 4.2.2011, pp. 34–39)

Successive amendments to Decision 2011/77/EU have been incorporated in the original text. This consolidated version is of documentary value only.

RELATED ACTS

Council Regulation (EU) No 407/2010 of 11 May 2010 establishing a European financial stabilisation mechanism (OJ L 118, 12.5.2010, pp. 1–4)

See consolidated version

last update 22.01.2017