- Title: BELGIUM: EU says not contacted by Britain on Irish bank plan
- Date: 3rd October 2008
- Summary: (W3) BRUSSELS, BELGIUM (OCTOBER 2, 2008) (REUTERS) EXTERIOR OF THE EUROPEAN COMMISSION EU FLAGS
- Embargoed: 18th October 2008 13:00
- Keywords:
- Location: Belgium
- Country: Belgium
- Topics: European Union,Finance
- Reuters ID: LVA31PGU7FI8KOWX08H6QA0C4QWL
- Story Text: Brussels' European Commission said on Thursday (October 2) it had not received notification from Dublin of its deposit guarantee scheme and could therefore not make a decision as to whether or not it complied with EU competition rules.
Commission spokesman Jonathan Todd said that if the Irish deal contravened EU laws the government would have to repay any monies paid out.
Ireland's parliament defied opposition from London and misgivings in Brussels by passing legislation to guarantee all deposits in Irish-only banks that has already triggered an inflow of cash from British banks.
Todd said he had not been officially contacted by Britain either but was aware of media reports that British Prime Minister Gordon Brown wanted Ireland to ensure the bank guarantees meet EU rules.
"To my knowledge we have not been contacted officially by the UK government or by UK banks. We've read the newspapers, however. As regards how long it will take, well it will all depend on what they notify, what the details are. If there is no, if we are satisfied there is no element of state aid then we don't do anything. If it's rescue aid we would try to reach a decision within a matter of days. If it's restructuring aid then we would have to go into more detailed analysis, we could decide to open an in-depth investigation within two months of receiving notification," Todd said.
Asked about minimum deposit guarantees across Europe Johannes Laitenberger, spokesman for European Commission President, said there was existing EU legislation in place already but that member states could add to them.
"You are aware that there is a European directive which foresees a minimum which is the same for all member states namely 90 percent with a cap at 20,000 euros. That is the state of EU legislation at this stage and member states or operators can complement this with additional schemes,"
Laitenberg said.
The Irish decision on deposit guarantees posed a challenge for the rest of Europe in an era where banks are increasingly cross-border, risking a distortion of competition which EU rules are meant to prevent.
Spain's Economy Ministry said it would support a coordinated EU effort to raise bank deposit guarantees from the current Europe-wide minimum of 20,000 euros.
A European Commission source said EU regulators would probe Ireland's move but acknowledged that any legal action would be politically risky at a time when Brussels is trying to persuade the Irish to reverse their vote against the EU reform treaty, and would take at least two years to come to court. - Copyright Holder: REUTERS
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