I propose to take Questions Nos. 18 and 39 together.
The European Union, through various Directives and Regulations, currently provides for common rules to be applied by national supervisors. There is no single European supervisor although supervision is co-ordinated at a European level by the European Banking Authority. Supervision, deposit insurance and resolution are all national competencies.
The proposal for a banking union was first mooted by Commission President Barroso on 23 May. It has developed considerably over the last number of weeks in the context of the ongoing eurozone crisis, culminating in the paper on Economic and Monetary Union considered at last week's European Council.
One of the main proposals in the paper on Economic and Monetary Union relates to an integrated financial framework. It proposes that, building on the single rule book, an integrated financial framework should have two central elements: [a] single European banking supervision and [b] a common deposit insurance and resolution framework.
The statement also stated that the European Commission will present proposals on the basis of Article 127(6) of the Treaty on the Functioning of the European Union for a single supervisory mechanism shortly and asked the European Council to consider these proposals as a matter of urgency by the end of 2012. These proposals, when published will be examined fully by my Department. It is premature at this stage to speculate on what may be contained in these proposals. Of importance to Ireland is that these proposals are coherent and make a substantive contribution to strengthening the Eurozone's financial system.
As the Deputy will be aware, the Euro area Summit Statement of 29 June affirmed the importance of breaking the vicious circle between banks and sovereigns and committed to further examining the situation of the Irish financial sector with a view to improving sustainability.