Michael Noonan (Limerick City, Fine Gael)

I am not too sure the devil is in the detail in this case. The eminent economist, Colm McCarthy, was saying during the week that in this case, the devil is in the principle. Getting the principle right is probably the most important thing and we can work out the detail subsequently. It is not as clear cut as the Deputy saying that the ESM will be the funder. It looks as if that will be the way it may go, but there is no power within the ESM treaty at the moment to recapitalise banks. There is a catch-all provision at the end which it is stated that the governors or the ministers for finance may, by unanimous decision, take almost unlimited powers of intervention and give them to the ESM. Therefore, that step is there before the ESM can act.

Doing something about Spain's banks is imminent and I think it will occupy our work on Monday and Tuesday to a large degree. However, I understand that the funding mechanism in the first instance will be the EFSF and not the ESM, and there will be subsequently some transfer from the EFSF onto the ESM. That seems to be the general intention at the moment. We will be watching that very carefully, because if the principle of equality is sacrosanct, the manner in which the Spanish banks are dealt with will be an important precedent for our negotiations.

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