EC Extends Irish Credit Union Restructuring Scheme Until April 2021
EC has decided, under the EU State aid rules, to extend the Irish credit union restructuring scheme until April 30, 2021. The objective of the scheme is to underpin the stability and long-term viability of credit unions and the credit union sector in Ireland at large. The scheme was initially approved in October 2014 and last prolonged in May 2020.
Restructuring involves merging credit unions with ample reserves with credit unions with a gap, providing, if necessary, a capital injection to make up any shortfall in the capital reserve requirements of the merged credit union. Stabilization involves assisting fundamentally viable credit unions that have temporarily slipped below the regulatory reserve requirements. EC found that this measure ensures that the beneficiaries become viable in the long-term through restructuring or merging with sound credit unions and that they contribute to the cost of restructuring. Moreover, the impact on competition is limited because credit unions are small and do business only with members. Until now, the Irish authorities have managed to restructure credit unions without granting any aid under this scheme.
Related Link: News Release
Keywords: Europe, EU, Ireland, Banking, Restructuring, Credit Unions, State Aid Rules, EC
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