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EC approves cash injection of up to €13bn for AIB/EBS

THE European Commission yesterday cleared the way for the Government to pump as much as €13.1bn into the newly merged AIB/EBS, provided the banking group can be returned to "long-term viability".

The emergency permission was granted before the institution's upcoming recapitalisation at the end of July, and comes days after Brussels approved state aid of up to €5.35bn for Bank of Ireland.

The EC said AIB's rescue was conditional on the bank supplying a business plan that showed "a return to long-term viability".

Other conditions include "adequate participation in the restructuring cost by shareholders and subordinate debt holders" and "measures to limit competition distortion". AIB's shareholders will be left owning just 0.2pc of the bank after the injection.

The EC said it approved the aid because it was "necessary to increase the bank's solvency ratios".

Irish Independent