Full text of Statement by the Eurogroup and ECOFIN Ministers

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

28 November 2010

Statement by the Eurogroup and ECOFIN Ministers
Ministers unanimously agreed today to grant financial assistance in response to the
Irish authorities' request on 22 November 2010. Ministers concur with the
Commission and the ECB that providing a loan to Ireland is warranted to safeguard
financial stability in the euro area and the EU as a whole.
Euro-area and EU financial support will be provided on the basis of a programme
which has been negotiated with the Irish authorities by the Commission and the IMF,
in liaison with the ECB. Ministers welcome the staff-level agreement on a three year
joint EU/IMF financial assistance programme for Ireland. The Irish Government
approved the programme on 28 November.
Ministers unanimously endorse the measures announced today. Building on the strong
fundamentals of the Irish economy, the programme rests on three pillars:
-

An immediate strengthening and comprehensive overhaul of the banking system

-

An ambitious fiscal adjustment to restore fiscal sustainability, including through
the correction of the excessive deficit by 2015

-

Growth enhancing reforms, in particular on the labour market, to allow a return to a
robust and sustainable growth, safeguarding the economic and social position of its
citizens.

The financial package of the programme will cover financing needs up to € 85 billion,
including € 10 billion for immediate recapitalisation measures, € 25 billion on a
contingency basis for banking system supports and € 50 billion covering budget
financing needs. Half of the banking support measures (€ 17½ billion) will be financed
by an Irish contribution through the Treasury cash buffer and investments of the
National Pension Reserve Fund. The remainder of the overall package should be
shared equally amongst: (i) the European Financial Stabilisation Mechanism (EFSM),
(ii) the European Financial Stability Facility (EFSF) together with bilateral loans from
the UK, Denmark and Sweden, and (iii) the IMF (€ 22½ billion each).
The main elements of policy conditionality, as endorsed today, will be enshrined in
Eurogroup and Council Decisions to be formally adopted on 6 and 7 December.
The Eurogroup will rapidly examine the necessity of aligning the maturities of the
financing for Greece to that of Ireland.

Annex : Distribution of the loan to Ireland

Total programme volume
Contribution by Ireland
External support
Total

€ (billion)
17.5
67.5
85.0

External support breakdown
IMF (1/3)∗
Europe (2/3)
Total

€ (billion)
22.5
45.0
67.5

European breakdown
EFSM
EFSF (+ bilaterals)
Total

€ (billion)
22.5
22.5
45.0

EFSF (+ bilaterals) breakdown
EFSF (effective) euro area
United Kingdom
Sweden
Denmark
Total

€ (billion)
17.7
3.8
0.6
0.4
22.5

∗Subject to the IMF Board's approval