Dáil Éireann Debate, Tuesday - 8 April 2014
27. Deputy Richard Boyd Barrett asked the Minister for Finance the latest developments in the Government's efforts to achieve retrospective recapitalisation of the Irish banks and to reduce Ireland's debt burden; and if he will make a statement on the matter. [16151/14]
View answerAs I have outlined in my replies to a number of previous Parliamentary Questions, the Euro-area Heads of State or Government (HoSG) agreed in June 2012 that "it is imperative to break the vicious circle between banks and sovereigns", and that when a Single Supervisory Mechanism, involving the ECB, is in place and operational, the European Stability Mechanism could recapitalise banks directly.
The Eurogroup meeting on 20th June 2013 agreed on the main features of the European Stability Mechanism's Direct Recapitalisation Instrument or DRI. There is a specific provision included in those main features, which states that "The potential retroactive application of the instrument should be decided on a case-by-case basis and by mutual agreement." Therefore, the agreement, that we were active in negotiating, keeps open the possibility to apply to the European Stability Mechanism for a retrospective direct recapitalisation of the Irish banks, should we wish to avail of it.
The operational framework of the DRI has been discussed at ministerial level and the aim is to complete this discussion as soon as possible in order to allow the ESM Member States sufficient time to complete any necessary national procedures before the SSM is in place and operational later this year.
Finally, both I and my Government colleagues will ensure that Ireland's case for retrospective direct recapitalisation is made at all levels as appropriate. I remain confident that the commitment made by the Euro-area Heads of State or Government in June 2012 to break the vicious circle between banks and sovereigns will be respected.
