Dáil Éireann Debate, Tuesday - 21 May 2013
85. Deputy Bernard J. Durkan asked the Minister for Finance the extent to which he and his Eurozone colleagues have reached agreement in the context of separation of banking and sovereign debt; if any projections have been done to estimate economic growth potential in the aftermath of such agreement as envisaged at the June summit of 2012; and if he will make a statement on the matter. [23889/13]
View answerI wish to inform the deputy that work continues at a technical level to complete the design of the ESM’s Direct Banking Recapitalisation instrument before the end of June, as has previously been agreed at political level. Once the final version has been agreed by Ministers the instrument will need to pass national procedures which would take place during the second half of the year before it can become operational. Ireland continues to engage and put the case that retrospective recaps should be facilitated. As the Deputy will be aware, the European Council in October 2012 reaffirmed that the “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 discussions remain on-going in relation to this issue and no conclusion has been reached it is premature to speculate on the potential impact on economic growth.
