The European Commission gave approval for the Government to inject funds into Anglo Irish Bank and Irish Nationwide for the moment, but has also begun an in-depth investigation into the total aid received so far by Anglo.
Read more on Anglo's results and loans to directors
The Commission said it had backed recapitalisation worth up to €10.4 billion for Anglo and €2.7 billion for Irish Nationwide as emergency measures and to help preserve financial stability in Ireland. The approval is valid until June 22. The EU had already approved €4 billion for Anglo last year.
But the Commission has opened a probe into the total aid received so far by Anglo Irish Bank and the bank's restructuring plan which has been submitted to the EU. The Commission said interested third parties could comment on the measures concerned. It has also asked Anglo to submit a revised plan by the end of May.
The €10.44 billion for Anglo represents the €8.3 billion announced by Brian Lenihan yesterday but notified to the Commission earlier in the year and a further €2.1 billion prompted by the heavy discount on the NAMA loans it is transferring. Mr Lenihan said yesterday that Anglo could need up to €10 billion on top of the €8.3 billion.
Commission vice-president for competition Joaquin Almunia said there was no doubt that both institutions needed significant sums to meet their obligations, adding that the measures were also necessary to preserve financial stability in Ireland.
'However, INBS needs to establish a viable restructuring plan and Anglo Irish Bank has to restructure profoundly in a way that effectively tackles the weaknesses of the past business model and ensures a sustainable future without continued State support,' he said.
Irish Nationwide has until June 22 to submit a restructuring plan to the EU for approval.
