Ireland must ensure bank guarantee meets EU rules-UK

Britain wants Ireland to look closely at its guarantee of all deposits in Irish banks to make sure it complies with European Union competition law, a spokesman for Prime Minister Gordon Brown said on Wednesday.
More generally, he said, European governments should make sure that whatever actions they took to tackle the global financial crisis complied with EU competition law.
British banks compete with Irish banks both in Britain and in Ireland and have voiced fears they could lose out competitively to Irish banks that enjoy the full guarantee.
The Irish pledge on Tuesday to undedrwrite the country's banking system triggered a flood of cash from British businesses to Irish banks, a senior Irish stockbroker said.
"We just want the Irish government to look quite closely at the arrangements they are putting in place to make sure they comply with EU competition law," the British government spokesman said.
He said Britain was in contact with Irish authorities at a high level over the issue.
Ireland guaranteed all bank deposits on Tuesday in a bid to improve the industry's access to international funds frozen by the global credit crunch.
The pledge covers up to 400 billion euros ($575 billion) of liabilities — more than twice the country's annual gross domestic product — and includes retail, commercial and interbank deposits.
But the spokesman said the issue was not just about Ireland.
"A number of European governments are taking steps to deal with the current financial instability, and the key element is that ultimately the (European) Commission needs to approve those steps being taken across the EU," he said.
"We all have problems, we are all taking steps, and all those steps need to be compliant with what the Commission is happy with, whether it's the Benelux issue the other day or the Irish announcement yesterday," he said.
FORTIS BAILOUT
In the biggest European bank bailout since the credit crisis began, the Belgian, Dutch and Luxembourg governments took a 49 percent stake in Fortis on Sunday with a 11.2 billion euro ($16.4 billion) injection.
Brown said on Tuesday the British government plans to raise the guarantee for bank savings to 50,000 pounds ($90,560) from 35,000 pounds in a new banking law.
But he appeared to rule out following the Irish example.
"Let's remember that the Irish are dealing with taxpayers' money here. We have got to get what is right and also what is reasonable," he told the BBC.
In Dublin, a finance ministry spokesman said Ireland was in contact with its European partners over the government's move.
"We have been liaising with our European partners since the decision was made," the spokesman said. "Brussels would have been notified just in advance of the decision being announced."