Enda Kenny (Mayo, Fine Gael) | Oireachtas source

First, it is important to appreciate the scale of the challenge the European Union and the eurozone faces. We are now in the fourth year of economic challenges and difficulties. The Deputy spoke of a clear and honest articulation. My job as Taoiseach and Head of Government is to deal with the other 26 EU Heads of Government when they meet in formal session. The decision taken on 29 June at the European Council has been articulated clearly:

We affirm that it is imperative to break the vicious circle between banks and sovereigns. The Commission will present proposals on the basis of Article 127(6) for a single supervisory mechanism shortly. We ask the Council to consider these proposals as a matter of urgency by the end of 2012.

That was the first element of the decision made by the Heads of Government to break the link between sovereign debt and bank debt and to allow for the direct recapitalisation of banks. This was clear without any misunderstanding.

The second element of the decision states:

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.

These were the two decisions made about the eurozone and Ireland specifically. They both stand and will be implemented. They are decisions, without equivocation, made at the meeting of the Heads of Government on 29 June.

As the Deputy will be aware, during the course of negotiations, statements can be made from different perspectives. Last Friday I had the opportunity to meet the Spanish Prime Minister, Mr. Rajoy; the Greek Prime Minister, Mr. Samaras, and the Italian Prime Minister, Mr. Monti. In each meeting we discussed the ongoing negotiations on the implementation of the 29 June decision. That is the position and the one taken by the Irish personnel involved in negotiations, including the Minister for Finance who has had intensive discussions with his counterparts who have been very helpful on Ireland's case. As far as I am concerned, on behalf of the Government, we want to see the clear decision and mandate given by the European Council implemented. That will be the focus and direction of our negotiations. It will be to follow through on the decision made to break the link between sovereign debt and bank debt, to allow for direct recapitalisation of banks and, in the case of Ireland, to improve its capacity to meet its debt problems. As the Deputy will know better than anyone else, it is a deal made in former years that we are trying to unwind.

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