Finance: Europe to probe EBS rescue plan
THE European Commission has opened a probe into the proposed restructuring of the Educational Building Society (EBS).
EU Competition Commissioner Joaquin Almunia said the commission would investigate the implications that the €875m pledged by the Government in June has for other financial institutions. "Ireland has taken decisive action to strengthen the EBS," the commissioner said.
"The amount of aid received by the EBS, however, justifies that we give interested third parties the opportunity to comment on whether distortions of competition are adequately addressed."
A restructuring plan was submitted on May 31 but a preliminary assessment of the plan has raised the commission's concerns.
The commission considers it appropriate to offer third parties, including competitors, an opportunity to comment.
In addition, the commission said it required more information to underpin the claim that EBS will not need further State aid and will restore its viability through the plan.
"After a preliminary assessment of the plan, the commission has concerns whether the distortions of competition caused by the aid to the EBS are sufficiently addressed by the measures proposed in this plan," said a statement from the commission.
The EU member states have previously shown their support for the Government's actions with the financial industry.
"We trust Ireland," French Minister Christine Lagarde said last week.
The recapitalisation resulted in the nationalisation of the financial institution, which has also received aid through asset purchases by NAMA.