Mary Lou McDonald (Dublin Central, Sinn Fein)
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Question 54: To ask the Minister for Finance if he has sought and secured Cabinet approval for the forthcoming extension of the Credit Institutions (Eligible Liabilities Guarantee) Scheme 2009, which is due for renewal on 31 December 2011; and if he will make a statement on the matter. [34433/11]

Michael McGrath (Cork South Central, Fianna Fail)
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Question 145: To ask the Minister for Finance his plans to seek an extension of the eligible liabilities guarantee scheme into 2012; and if he will make a statement on the matter. [34587/11]

Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 54 and 145 together.

The Eligible Liabilities Guarantee (ELG) Scheme, which commenced on 9 December, 2009, has been an important support to the Irish system, helping to maintain the overall stability of the banking sector.

On foot of a recent Government decision, I have sought EU state aid approval for a prolongation of the ELG Scheme, on the advice of the Governor of the Central Bank and of the other State authorities, on financial stability grounds. I will be placing a Statutory Instrument before both Houses shortly which will enable the issuance period of the Scheme to extend to 31 December, 2012. The ECB was notified of the intention to provide for this extension and has stated that a further extension of the Scheme would be beneficial.

The Deputies will however be aware that 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 application for approval has been made and a positive reply is expected shortly

The extension of the ELG Scheme is a necessary element in maintaining confidence of deposit holders in the domestic banks and in continuing to facilitate the Irish banking system in accessing both short and longer term funding.