In my statement on the 14th December 2008, I announced the Government's decision to support, alongside existing shareholders and private investors, a recapitalisation programme for credit institutions in Ireland of up to €10 bn. This will be done through the National Pensions Reserve Fund or otherwise and subject to terms and conditions.
I indicated that the State's investment may take the form of preference shares and /or ordinary shares and the State may, where appropriate, participate on an underwriting basis. In principle existing shareholders and private investors will be expected to have the right to subscribe for new capital on the same terms as the Government.
In order to safeguard fully the interests of the taxpayer, State investment will be assessed on a case- by- case basis in an objective and non-discriminatory manner, having regard to the systemic importance of the institution, the importance of maintaining the stability of the financial system in the State, and the most effective and economical use of resources available to the State and each of the credit institution's particular investment requirement for capital. Any State investment will be taken in line with best practice in the EU and elsewhere and consistent with the EU State aid rules, in particular the recent European Commission communication on recapitalisation.
