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

That is a trap he should avoid as it will not get him anywhere.

I have noted yesterday's statement by three finance Ministers from Germany, the Netherlands and Finland. The statement addresses issues already decided upon by eurozone leaders when they met in Brussels on 29 June. As the Taoiseach set out this morning, the Heads of State and Government made two important decisions on 29 June, the first of which was to "affirm that it is imperative to break the vicious circle between banks and sovereigns." The second, which related specifically to Ireland, was the following:

The Eurogroup will examine the situation of the Irish financial sector with the view of further improving the sustainability of the well-performing adjustment programme. Similar cases will be treated equally.

I emphasise the reference to equal treatment.

Since that date, work has been proceeding on both of these elements. Officials from my Department have travelled to several capitals. I travelled to Paris, Berlin, Rome and on to the informal ECOFIN meeting in Cyprus two weeks ago, during which I had constructive talks with my colleagues. The Taoiseach met with several colleagues last week in Rome and all agreed that the imperative is to move ahead urgently to implement all of the important decisions taken on 29 June. I also draw the attention of the House to comments from the European Commission this morning, which set out that the agreement of 29 June was clear regarding the European Stability Mechanism and breaking the "vicious cycle" between sovereign and banking debt.

We are engaged in a diplomatic offensive to implement the decision of 29June to break the link between banks and the sovereign and enhance the sustainability of our debt. I acknowledge that the three Ministers and their officials whom I met in their capitals, as well as other EU finance Ministers, have been helpful in moving forward the technical discussions with the troika, namely, the European Central Bank, the European Commission and the International Monetary Fund, on the banking debt issue in respect of Irish needs.

It is in the nature of EU business that differences of interpretation may arise. However, one thing is clear - the principle of breaking the link between sovereigns and banks has been agreed by the Heads of State and Government. No one has questioned this. That being so, our ambassadors in the relevant capitals and senior officials in Dublin are today urgently making contact to follow up on developments.

This morning, a number of Deputies were disingenuous in attributing statements to my Department. As those who read the statement from the three finance Ministers will have seen, they made reference to the recent positive reviews of the Irish and Portuguese EU-IMF programmes, which is welcome. The strong implementation of reforms is one of the reasons Ireland's global reputation has improved so significantly and has led to record levels of foreign investment in the State. The Government is committed to restoring confidence at home and internationally and the recognition by the three Ministers of the sacrifices that the Irish people have made should be welcomed.

Ireland will be fully engaged in the process by the euro group and Heads of State and Government on how this will happen. In putting forward our ideas, we must be conscious that other member states will also put forward their proposals. However, as was pointed out by the Taoiseach this morning and my Department yesterday afternoon, Ireland's position is clear in this regard. Work is continuing in line with the summit agreement of 29 June to break the link between banks and sovereigns and on the principle that similar cases will be treated equally. As I stated, the European Commission reinforced this point this morning.

It is worth pointing out that the Taoiseach, the Tánaiste and I, along with ambassadors and senior officials, have been vocal in our view that the vicious cycle between banking and sovereign debt should be broken. I remind the Deputy of the letter the Taoiseach sent to his fellow leaders earlier this year setting out the Government's position. We want to continue to work in a constructive spirit to enhance the sustainability of our debt. We have made strong, solid progress in implementing the terms of our EU-IMF programme and have lived up to all of our commitments. The financial markets have recognised this, as reflected in the reduction of our bond spreads in recent months. To be clear, Heads of State and Government made a decision on these issues and we continue to work within that framework to deliver the best possible outcome for the Irish taxpayer.

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