BRUSSELS, Belgium—The European Commission had agreed to provide €280-million program to help restructure some of Ireland’s 374 credit unions, mostly state-funded. Of that, €25 million is to support mergers of some of the credit unions, while €30 million has been earmarked to stabilize specific credit unions. According to the EC, funds will initially come from Ireland’s government, but will be refunded by the bodies helped, and from a levy on the sector.
Credit unions, provided they have a certain minimum level of reserves, can apply for capital injections to raise their reserves, while those below the ratio will have to be liquidated or merged with stronger credit unions. The Central Bank has been charged with assessing the viability of each credit union which is part of the conditions for the operation of the program. Only credit unions with up to €100 million in assets will be permitted to benefit from the aid. The average Irish credit union has assets of approximately €35 million each. Ireland’s credit unions have continued to struggle since the recession, with many seeing considerable erosion in capital, although most are now operating in the black.