The Taoiseach will represent Ireland at the European Council on 24/25 October 2013. The Council agenda includes the following subjects: digital economy, innovation and services; growth, competitiveness and jobs; and the economic and monetary union. These issues are of great importance to Ireland’s and Europe’s future growth prospects. While I will not be attending the Council, I can assure the Deputy that every suitable opportunity is taken to present Ireland’s case by all Ministers at the many international fora they attend while representing this country.
In this context I would point to a number of positive developments during the lifetime of this Government to date that will serve to alleviate our debt burden including the reduction of the interest rates on our EU programme borrowings, the extension of the maturities of our EFSF and EFSM loans and the replacement of the Promissory Notes issued to the Irish Bank Resolution Corporation (IBRC) with a series of longer term, non-amortising floating rate Government bonds. In addition, as you are aware the Euro-Area Heads of State or Government agreed on 29th June 2012 to break the vicious circle between banks and sovereigns, and that when a Single Supervisory Mechanism is in place involving the ECB, the European Stability Mechanism (ESM) could recapitalize banks directly. The Euro-Area Heads of State or Government confirmed this position and mandated EU Finance Ministers to prepare an operational framework by mid-2013.
A considerable amount of work has been undertaken at technical, senior official and Ministerial level on the ESM’s Direct Bank Recapitalisation Instrument (DBR). This work culminated in agreement on the main features of the operational framework for the ESM’s DBR Instrument at the June 20th Eurogroup meeting of Euro-Area Finance Ministers in Luxembourg.
We have succeeded in having specific provision for retrospective recapitalisation included in the framework, which states that “The potential retroactive application of the instrument should be decided on a case-by-case basis and by mutual agreement.” There is still a lot of negotiation to be done on this but the agreement now in place keeps the possibility to apply to the ESM for a retrospective direct recapitalisation of the Irish banks open for us, should we wish to avail of it.