State aid: Commission approves prolongation of Irish credit union restructuring scheme

The European Commission has approved, under EU State aid rules, the twelfth prolongation of an Irish scheme aimed at restructuring credit unions. The scheme was initially approved in October 2014 and last prolonged in May 2020. The objective of the scheme is to underpin the stability and long-term viability of credit unions and the credit union sector in Ireland at large. Restructuring involves merging credit unions with ample reserves with credit unions with a gap, providing, if necessary, a capital injection to make up any shortfall in the capital reserve requirements of the merged credit union. Stabilisation involves assisting fundamentally viable credit unions that have temporarily slipped below the regulatory reserve requirements. The Commission found that the measure ensures that the beneficiaries become viable in the long-term through restructuring or merging with sound credit unions, and that they contribute to the cost of restructuring. Moreover, the impact on competition is limited because credit unions are small and do business only with members. Until now, the Irish authorities have managed to restructure credit unions without granting any aid under this scheme. Today’s authorisation is granted until 30 April 2021. More information will be available on the Commission’s competition website, in the public case register under the reference SA.58819.