Brian Lenihan Jnr (Dublin West, Fianna Fail)

The legal drafting of the Credit Institutions (Stabilisation) Bill by the Office of the Chief Parliamentary Counsel could not begin until the conclusion of the negotiations with the IMF, the European Central Bank or ECB, and the European Commission which resulted in the programme agreement. Once a near final draft of the Bill was available, this was shared with the European Central Bank which was aware that the provisions in the Bill were required on an urgent basis to effect the restructuring of the banking sector. While the timeframe available for the consultation process was short, in advance of the circulation of the draft Bill to the ECB, my officials were in close contact with ECB services to facilitate an efficient and speedy consultation. It should be noted that the ECB welcomed the broad powers provided for in the Act.

The ECB opinion was received after the Bill had passed all Stages in the Oireachtas. My Department is carefully considering the ECB opinion, working closely with the Attorney General. I will be responding formally to President Trichet shortly on the main points raised in the opinion. In advance of this, it would be inappropriate for me to comment on the detail of the ECB's opinion although I believe that the main legal issues raised in the opinion can be fully addressed.

Regarding any discussions that the Governor and the Central Bank may have had on the content of the Bill with the ECB, the Deputy will note that I would not be a party to these discussions and I am not, therefore, in a position to make any comment on them. It is important to make the point that, as I highlighted in my speech on Second Stage, the fundamental purpose of the legislation was to ensure that the national authorities had the legislative tools to achieve the restructuring of the banks which we are committed to under the terms of the joint programme agreement with the EU and IMF, agreed in consultation with the ECB.

Regarding the opinions on the independence of the Governor and the Central Bank, section 5 of the Act provides that nothing in the legislation affects any obligation arising under the EU treaties, and protects the treaty principle of central bank independence. In regard to the position of the ECB as a creditor, which was the main focus of the opinion, I would have to take account of the position of the ECB when forming an opinion regarding the effect of orders and other obligations of the relevant institutions under section 61. The Central Bank of Ireland will be closely involved in the planning and decision making on any transfer measure.

As regards the concern raised by the ECB on the constitutionality of the Act, I believe this is not within the competence of the European Central Bank.

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