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

It is a decision-making forum. They might decide to send an application to a sub-committee and let it come back and advise them. There are different ways of doing things, and we will not know the actual decision-making process until the first case goes before them.

I have a note which might be of benefit. On 10 June 2014 the euro area member states reached a preliminary agreement on the operational framework for the ESM's direct recapitalisation instrument. Their draft guideline on financial assistance for the direct recapitalisation of institutions clearly establishes the scope of eligibility criteria for an operational process of direct recapitalisation. The provision for retrospective recapitalisation provides for a decision on a case-by-case basis. From our point of view that provides a broad degree of flexibility of interpretation. Demanding more detail would most likely have resulted in a more restrictive retrospective instrument, which would not have been in our interests.

On the amount borrowed from the European Union, programme funding was provided for the purpose of stability support. It was not earmarked for particular purposes and it is not valid to say otherwise. The amount of bank recapitalisation under the programme was €17 billion, and that was provided within the overall programme envelope of €85 billion, including our own resources of €17.5 billion.

There is another note which might be of interest. It is important to recognise that the ESM's direct recapital powers is part of a broader EU response to breaking the link between banks and sovereigns. It must be viewed in conjunction with the banking union measures, particularly the bank recovery and resolution directive, the single supervisory mechanism, the single resolution mechanism, and the single resolution fund. The figure of €60 billion was the figure agreed upon in the context of an ESM fund whose principal function is to lend to sovereigns, not banks. As the Deputy knows, the ESM has a maximum lending capacity of €500 billion. Given the way the rating agencies treat these matters, if the €60 billion for DRI was fully used up, the remaining lending capacity would be less than €440 billion and would in fact be closer to €330 billion. It is a relatively small fund if we think of a fund for supporting a currency.