Micheál Martin (Cork South Central, Fianna Fail) | Oireachtas source

In June, the leaders agreed what the Taoiseach called a game change for the economic crisis. Central to this was a banking union that was to start operation with a single supervisory mechanism on 1 January. Two summits later and the agreement is unravelling. A proper banking union is vital. Without one, a properly functioning financial system will not be restored to the eurozone.

In the past five months, the proposal has been continually watered down at ministerial level. The start date for the new supervisory system has been abandoned. There has been no progress in agreeing which banks will be under the system. Of concern is the fact that there are now signs that there will be no cross-eurozone deposit insurance fund or bank resolution regime. The most that appears to be under discussion is a co-ordination of national policies in this area.

Last week's meeting of finance Ministers ended in a general tone of despair. All movement was backwards. What has yet to be explained is the position of the Irish Government in those discussions. It has been reported by the Financial Times that some countries were proposing a quite ambitious approach to creating the banking union, part of which potentially involved a treaty change. It was in this context that the Government apparently made its only significant contribution. According to the account given by the Financial Times, Ireland led opposition to anything that would require a treaty change. It appears that our only policy is that, whatever is agreed, we do not want to need to ask the people's permission.

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