Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

There is always briefing in Europe; it is the nature of it. There are 28 countries and officials from all the countries, including permanent representatives in Brussels from everywhere. There is constant briefing and re-briefing by practically everybody out there, so we should not get too excited by one briefing.

As regards the recapitalisation of banks by an agency other than sovereign governments, the European Stability Mechanism or ESM is the relevant European institution. The ESM and its regulatory regime are not yet fully in place.

In discussing the regulations under which the recapitalisation would operate, we have made progress and have succeeded in maintaining a position whereby retroactive recapitalisation may take place by unanimous decision of the ESM governors who are the finance ministers of the 28 EU countries under a different title. That has now been agreed and it is going through the lengthy bureaucratic process that normally occurs in Europe. It will not be implemented until November, so there is no opportunity for us to file an application for retroactive recapitalisation until after November this year. We are reviewing the position as we go towards that date and we will see what the position is then. The difficulty in negotiating it will be that it requires a unanimous decision.

Our argument is that when the heads of State and Government in June 2012 promised that action would be taken, the argument was about the sustainability of the Irish debt. Things have changed dramatically since 2012, however. Our ten-year bond prices are approximately 2.4% yesterday and today, while Spain, Italy, Portugal, Greece and Slovenia are trading outside us - in other words, they have higher interest rates on their ten-year bonds. It is very hard to convince Ministers from those countries that Ireland needs additional assistance to make its debt sustainable when the markets have decided that we are in a more sustainable position than they are. That is where the argument becomes difficult. We will evaluate the situation.

The other thing that has changed is that what was envisaged at the time of the commitment was that there would be some exchange of Irish bank shares for money and that the ESM, through some mechanism or other, would acquire some or all of the Irish bank shares. In exchange, it would give us money which we would use to reduce our debt. That was the simple and obvious way. It is perhaps more complex, but that was the simple idea behind it. Since then, Bank of Ireland, for example, has paid back €1 billion more than the taxpayer committed to it. On top of that, we own 14% of its share capital. It does not make any great sense to give away some of the shares in Bank of Ireland.