The European Commission has approved Government plans to inject additional money into Anglo Irish Bank. But the final amount depends on the value of the bonds it eventually receives from the National Asset Management Agency in return for loans.
The Commission said the Government had notified it at the end of June that it wanted to put just under €8.6 billion into Anglo, which would bring the total up to €22.9 billion. Finance Minister Brian Lenihan had indicated in March that Anglo may need €22 billion in total.
But today's decision allows another €1.4 billion to be given to Anglo. The bank is receiving bonds for NAMA in return for its loans. The additional funds could be used depending on the final value Anglo puts on those bonds in its accounts.
The Commission said the approval was temporary, pending a final EU decision on Anglo's restructuring plan, which the bank has indicated it expects in September.
Competition Commissioner Joaquin Almunia said the measure was necessary to preserve financial stability in Ireland, but warned that Anglo Irish Bank would have to 'restructure profoundly'.
This is the third emergency injection of funds approved by the EU. On March 31, Finance Minister Brian Lenihan provided €8.3 billion to Anglo, on top of the €4 billion the Government put into the bank last year.
At the time, the Minister indicated that the bank could need another €10 billion. It committed €2 billion of that additional €10 billion at the end of May.