Dáil Éireann Debate, Wednesday - 16 January 2013
142. Deputy Michael Healy-Rae asked the Minister for Finance his views on correspondence (details supplied) regarding the recapitalisation of Ireland's remaining banks; and if he will make a statement on the matter. [1271/13]
View answerThe European Council in October 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.”
As the Deputy will be aware, the Taoiseach and Chancellor Merkel spoke together following the October European Council and discussed the unique circumstances behind Ireland’s banking and sovereign debt crisis, and Ireland’s plans for a full return to the markets. 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.
As the establishment of a new supervisory mechanism is a pre-requisite for direct banking recapitalisation, it is likely that reaching an outcome here will take longer than our discussions in relation to the promissory notes. Aside from the issue of when this new instrument will become available, there is a host of other issues that have yet to be worked through such as how the ESM would run these banks, what governance arrangements would be put in place between the fund and the banks themselves and indeed between the ESM and Member State governments.
As the Deputy is aware, the Irish Government has been working extremely hard to secure a deal on the Irish bank debt with our European partners and detailed work will continue to ensure that positive moves in Europe are harnessed to maximise the benefit to the Irish taxpayer. This work is one of the Government’s key priorities and will remain a key focus during the EU presidency.
