Enda Kenny (Mayo, Fine Gael) | Oireachtas source

I will lay out some of the groundwork for Deputy Adams during the pre-Council discussion we will have later. I spoke directly to President Van Rompuy. It is fundamental that decisions made by Heads of Government are followed through. The decision was not made by the German, Dutch or Finnish Ministers for Finance. The decision was made by the 27 Prime Ministers, and the Chancellor of Germany and the Prime Ministers of Finland and the Netherlands were party to the decision. The decision, which was very clear, was to break the link between sovereign and bank debt and to look at Ireland's improving position in the context of its debt sustainability.

The implication of the decision was that banks could be recapitalised directly through the ESM. The ESM has had its first board meeting and for this to happen, a banking union with a supervisory role must commence its work and the intention was that this should happen by 1 January. Of course there are divisions on whether it will cover all 6,000 banks in the first instance or have responsibility for the major banks. I remind the Deputy that it was not a major bank which caused the problem here which has required €64 billion to be pumped into the banking system.

In the context of the confusion, concern and anxiety in Europe, it is of critical importance that European leaders revisit the decision made on 29 June and examine what has happened since that can now be progressed by the leadership of the 27 member states to follow through on the decision made and see it is implemented. The ESM has held a meeting and the Commission has launched a paper on banking union. Implementing the decision will have a benefit for the country, the scale of which we do not yet know because it must be finally decided. We will look for the maximum benefit possible for our people and country.

The decision was made at the highest level of European governance comprising the leaders of the 27 member states. I look forward to participating in the debate on Thursday and Friday on behalf of the Government with the other 26 Heads of Government, and building on the negotiations that have already taken place. I will articulate this very strongly. This discussion will happen and it is on the agenda. I made it perfectly clear to President Van Rompuy that I will raise this matter and that I regard the decision as clearly including Ireland's position of legacy debt. The decision made on 29 June reflects this. I cannot speak for the Spanish Prime Minister on what is happening today with regard to the Spanish position, but for direct recapitalisation to take place the banking supervisory capacity must be put in place.

I referred to it being a seismic shift because it had never been done before at European level and there were those who said it could never happen. Deputy Adams stated the IMF and the ECB should get lost and get out of here. The people in his constituency would then not receive their payments and neither would the country. We have funding arrangements, unfortunately, with the troika of the IMF, ECB and the Commission and this will continue as long as we continue to meet our requirements and make our way towards exiting the bailout programme. We hope to be the first country that can do so, and our colleagues in Europe can help us in this regard by implementing the decision of 29 June. Separate from this, as the Deputy is aware, the Minister for Finance and officials are continually working on the question of the difficulties our people face because of the promissory note which we inherited and which requires a €30,000 million payment over ten years. This is a complex matter which is under discussion.

We will have a discussion after this on the European Council meeting, but central to my participation on Thursday and Friday will be the discussion on following through on the decision already made. It is not as if we have to make the decision; it is done and signed. Let us see that the 27 member states follow it through and implement it. For our part, when it becomes apparent we will see what benefits can accrue for the country.

See this speech in context