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Bank Debt Restructuring

Dáil Éireann Debate, Wednesday - 14 November 2012

Wednesday, 14 November 2012

Questions (85, 99, 103, 107, 108)

Thomas P. Broughan

Question:

85. Deputy Thomas P. Broughan asked the Minister for Finance his views on the impact of the recent statement by the Ministers for Finance from Germany, Finland and the Netherlands on the separation of bank and Government debt on efforts to reduce Irish bank debt; and if he will make a statement on the matter. [50298/12]

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Micheál Martin

Question:

99. Deputy Micheál Martin asked the Minister for Finance if the timing of the forthcoming elections in Germany are influencing the timeline of when Ireland's debt issue will be examined by the EU; and if he will make a statement on the matter. [47315/12]

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Micheál Martin

Question:

103. Deputy Micheál Martin asked the Minister for Finance the reason Ireland is a special case in relation to dealing with our legacy debt; and if he will make a statement on the matter. [48330/12]

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Richard Boyd Barrett

Question:

107. Deputy Richard Boyd Barrett asked the Minister for Finance if he will respond to the statement made by German Minister Wolfgang Schäuble, Finland's Jutta Urpilainen and Dutch Minister Jan Kees de Jager following a meeting in Helsinki on 25 September; and if he will make a statement on the matter. [41634/12]

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Richard Boyd Barrett

Question:

108. Deputy Richard Boyd Barrett asked the Minister for Finance if he will discuss the statement made by German Minister Wolfgang Schäuble, Finland's Jutta Urpilainen and Dutch Minister Jan Kees de Jager following a meeting in Helsinki on 25 September at the upcoming European Council meeting on 18 and 19 October 2012; and if he will make a statement on the matter. [41635/12]

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Written answers

I propose to take Questions Nos. 85, 99, 103, 107 and 108 together.

As I have said previously, the statement by the three Finance Ministers of Germany, Netherlands and Finland on 25 September addressed issues already decided upon by Eurozone leaders when they met in Brussels on 29 June. At that time, the Heads of State or Government stated “that it is imperative to break the vicious circle between banks and sovereigns” and that “the Eurogroup will examine the situation of the Irish financial sector with the view of further improving the sustainability of the well-performing adjustment programme.”

The European Council on 18-19 October subsequently reaffirmed that “the Eurogroup will draw up the exact operational criteria that will guide direct bank recapitalisations by the European Stability Mechanism (ESM), in full respect of the 29 June 2012 euro area Summit statement. It is imperative to break the vicious circle between banks and sovereigns.”

Ireland is a special case due to the unique circumstances behind our banking and sovereign debt crisis and the fact that our banking crisis emerged at a time when the full range of European mechanisms were not available to us.

The Taoiseach and Chancellor Merkel spoke together following the October European Council. They reaffirmed the commitment from June 29th to task the Eurogroup to examine the situation of the Irish financial sector with a view to further improving the sustainability of the well performing adjustment programme. They recognised, in this context, that Ireland is a special case, and that the Eurogroup will take that into account.

The key timeline in regard to the realisation of these commitments is the establishment of the Single Supervisory Mechanism and not elections in any Member State. It is only once this has been put in place that the ESM will be in a position to recapitalize banks directly. It is expected that this will not be completed before the second half of next year.

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