Richard Bruton (Dublin North Central, Fine Gael)
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Question 35: To ask the Minister for Finance the extent of State aid that has been involved in the bank guarantee scheme since it commenced operation; and if there are plans to recoup this aid for the Exchequer. [24780/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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As the Deputy is aware, since 29 September 2008, the State has guaranteed certain liabilities of credit institutions in Ireland initially under the Credit Institutions (Financial Support) Scheme (the 'CIFS' Scheme) but more recently under the Credit Institutions (Eligible Liabilities Guarantee) Scheme (the 'ELG' Scheme).

The Eligible Liabilities Guarantee (ELG) Scheme, which commenced on 9 December 2009 following Oireachtas and EU State aid approval introduced important changes to the Guarantee for financial institutions bringing it more into line with the mainstream approach to similar guarantees in other EU Member States.

The ELG Scheme is intended to facilitate the ability of credit institutions in Ireland to issue debt securities and take term deposits with a maturity post-September 2010 of up to five years, on either a guaranteed or unguaranteed basis.

The ECB pricing recommendations on government guarantees for bank debt apply to liabilities guaranteed under the ELG Scheme. This is the standard pricing arrangements which now applies to all Guarantee schemes securing approval of the European Commission in line with the applicable State aid rules. The exact remuneration payable to the State is dependent on a range of factors such as the maturity profile of the liabilities and the extent to which institutions chose to make unguaranteed issuances, however the fee will be charged at a higher rate than under CIFS. The average fee for short-term bank debt now stands at 0.5% under the new scheme.

The yield to the Exchequer in respect of guarantee fees as remuneration from the institutions for the availability of the State Guarantee is expected to amount to at least €1 billion over two years from September 2008. To date €718 million in respect of the CIFS scheme and €90.5m in respect of the ELG scheme has been collected from the covered institutions.

The fees charged to guaranteed institutions have been approved by the European Commission and help ensure the compatibility of the guarantee schemes with EC state aid requirements. Other than in relation to the payment of these fees by the institutions participating in the guarantee schemes the issue of recouping the state aid provided under the schemes does not arise.