Michael Noonan (Limerick City, Fine Gael)

The Government has been fully committed to reviewing the arrangements that were put in place to capitalise the Irish Bank Resolution Corporation, formerly Anglo Irish Bank. The purpose of this review was to determine whether there is a way to reduce the overall cost to the State. The first step in this process was the settlement of the March 2012 promissory note repayment with a long-term Government bond. It is for these reasons the end of March payment was seen as an initial step in a medium-term process. The recent and very welcome euro area summit statement represents a major shift in European policy in terms of breaking the vicious circle between the banks and the sovereign. This is something the Irish Government has been saying is needed at European level to help tackle the crisis. It has been agreed that when an effective single supervisory mechanism for banks in the euro area and involving the ECB is established, the European Stability Mechanism could have the possibility to recapitalise banks directly. This is an agreement in principle and the detailed work will now begin to advance the process further.

The Government has been working very hard to secure a deal on Irish bank debt. The agreement at last week's euro area summit as set out in the statement provides an opportunity for the issue of the bank debt to be addressed at an EU level. While the policy position is very positive indeed, it would not be possible at this stage of the process to attempt to quantify the benefits which will accrue to the economy and Ireland generally.

While the details, structures and arrangements have yet to be finalised, the policy statement released following the euro area summit provides a basis for a euro area solution to what is essentially a euro area problem. This will be one of our key priorities between now and the end of year, with the initial formal steps, at a European level, taking place at the euro group meeting on 9 July.

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