Joan Burton (Dublin West, Labour)
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Question 171: To ask the Minister for Finance if he will set out his exit strategy from the credit institutions financial support scheme and bank eligible liabilities guarantee scheme; if he will comment on the ongoing EU state aid approval process from the extension of the ELG scheme beyond 30 June 2010; if he intends to extend beyond 29 September 2010 the deadline for issuance of liabilities covered by the ELG scheme; and if he will make a statement on the matter. [34226/10]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The Deputy will be aware that a Statutory Instrument which extends the Eligible Liabilities Guarantee (ELG) Scheme to 31 December 2010 was approved by both Houses of the Oireachtas yesterday, having previously received EU State aid approval. The Statutory Instrument provides the legislative basis for the extension of the ELG Scheme to 31 December 2010 for both deposits and liabilities eligible under the Scheme reflecting the approvals granted by the European Commission on 28 June 2010 and 21 September 2010 in line with the relevant State aid rules. Approval for the continued provision of financial support under the ELG Scheme must be sought from the European Commission every six months in accordance with EU State aid requirements.

This is an important support to the Irish banking system, facilitating its access to both short and longer term funding to help maintain the overall stability of the banking sector and complements the broad Government Strategy to restore fully the banking system and maximise its contribution to overall economic recovery.

My Department and the relevant state authorities along with the EU Commission will continue to monitor market developments over the coming months so as to confirm that the Guarantee continues to underpin the core principles of financial stability and funding access for the financial institutions.

Progress in relation to the phasing out of the guarantee will be achieved over time consistent with any requirement for continued support of the funding conditions of the banks and the maintenance of financial stability overall.