European Commission has authorized an emergency recapitalization of up to EUR10.054bn in favor of Anglo Irish Bank to ensure that the bank meets its regulatory capital requirements and maintain confidence in the Irish financial markets.

To date, the European Commission has approved two emergency capital injections for Anglo Irish Bank, EUR4b in 2009 and EUR10.44bn in March 2010, of which EUR10.3bn were effectively granted.

This is the third capital injection for Anglo Irish Bank since the beginning of the financial crisis. European Commission temporarily authorises this measure as emergency aid until it has reached a final decision on Anglo Irish Bank’s restructuring plan.

Ireland notified a capital injection of EUR8.581bn in favor of Anglo Irish Bank, to be paid in annual tranches over 10 years, at the end of June.

European Commission will cover the capital needs of the bank as of end of June 2010 until 31 December 2010 and will help the institution to preserve an adequate level of core Tier 1 capital.

Joaquin Almunia, vice-president for competition at European Commission, said: “Anglo Irish Bank needs a third emergency recapitalization to meet its obligations. The measure is necessary to preserve financial stability in Ireland.

“However, there is no doubt that 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.”