Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

No, it is an opinion, and I am entitled to an opinion. If I can continue, I will finish it and the Minister can respond. First, I refer to the way the ESM is set up and the quantum of money that is there - €60 billion for direct recapitalisation. The amount involved in Ireland in the case of AIB, Bank of Ireland and Permanent TSB is in the region of €30 billion, and that is just the retroactive element. The ESM direct recapitalisation is set up for all of the eurozone banks, so to suggest that Ireland could get a large share of that seems fanciful to me at this stage. In hindsight, the real game-changer was not the agreement in June 2012; the game-changer came a month later, when Mario Draghi stepped in and said he would do whatever it took to save the euro. That was the real game-changer for Ireland and the eurozone and, largely, that is what has brought stability to the financial markets. It is a major contributory factor in the low cost of borrowing for Ireland and other countries. That, to me, is the game-changer.

There are some basic questions to which we do not have answers - for example, whether the ESM will be willing to pay over the odds for shares it might acquire in any of the Irish banks. That is not written down anywhere, so clearly, if it is only paying what one would get elsewhere on the private markets, then one must ask what would be the benefit of selling to the ESM. There is no evidence of that. It is very clear now that the June 2012 agreement was over-egged by the Government. I think the Ministers all believed, in good faith, that there would be a shift in policy, but that did not happen. The really significant change came the following month, and that was what calmed the markets.

The Minister succeeded in getting the Article 14 provision on retroactive recapitalisation into the guidelines. I assume that was largely done at the behest of Ireland, and that has kept the door open. The Minister is working away at it, but in view of what he said today and what he said before the summer recess, the Tánaiste's comment that there are various ways to skin a cat and what the Minister said about possibly of selling a stake in AIB, before we have any clarity whatsoever on retroactive recapitalisation, if the Minister genuinely believed there was a real prospect of it, he would not be openly talking about selling a stake in AIB - he would get clarity first on whether it would be a real possibility for the country. I do not ask the Minister to give up by any means. He should apply and we should find out where we stand one way or the other in the coming months. If there is a refusal then we should move on, and the Minister can focus on developing a proper banking strategy for the country and examine what he can get from the markets by way of selling a stake. Personally, I would not support selling a stake in AIB for some time, as it is early days in its recovery. That is my observation.

I am not saying the Minister has given up. I do not ask him to give up. He must keep working on the issue. However, there will come a time - relatively soon - when he will have to put it up to our European colleagues by making a formal application. Let us find out where we stand. I can see no prospect that they will give Ireland €20 billion or €25 billion of the €60 billion that is available for a retroactive issue when the banks are currently capitalised. The money for that purpose was paid years ago. As the Minister said, the economy is recovering and the cost of borrowing is low. To me, the real game-changer was what Mario Draghi said in July 2012. That is my opinion. The Minister must bring the situation to a head in the coming months by applying, and at least then we will know where we stand.