EU approves recapitalization of Anglo Irish Bank
- Source: Xinhua
- [12:21 June 27 2009]
- Comments
The European Commission approved on Friday an emergency recapitalization worth four billion euros ( 5.6 billion US dollars) that the Irish government intends to grant to troubled property lender Anglo Irish Bank.
The European Union (EU)'s competition guardian said in a statement that the Irish measure constitutes an adequate means to remedy a serious disturbance in the country's economy while avoiding undue distortions of competition.
"In particular, the measure is limited in time and contains adequate safeguards to minimize distortions of competition," it said.
The aid is approved as a temporary rescue measure and Ireland has committed to submit a restructuring plan for the bank until the end of November 2009.
The proposed capital injection will be used to buy ordinary shares of Anglo Irish Bank and it does not change the ownership situation of the bank.
Anglo will use part of the proposed four-billion recapitalization to buy back at a significant discount certain outstanding subordinated loans it had issued in previous years.
The commission said the proposed measure is required as a matter of urgency to preserve the financial stability of the bank which is of systemic importance to the Irish financial markets.