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

To tease this out, it is unclear how the ESM will apply to AIB and Bank of Ireland and the funding injected into them. The recapitalisation of the banks was not through the bank guarantee but was a key part of the programme with the troika, as was the clear policy of the European Central Bank that no bank should fail and no senior bondholder should be burned. That was the essential position of the European authorities at the time, which they imposed on Ireland in the troika deal. The Taoiseach accepted this when he emerged from his meeting with the French President, Mr. Hollande, recently.

The Taoiseach is now saying that the way to deal with the promissory note is essentially to get it into a long-term mortgage, which will make the repayments easier. There are some benefits to this, but it does not mean a write-down. The Taoiseach is basically saying the promissory note's terms will be lengthened and put out into the distant future so there will be a greater capacity to deal with it. Where is the retrospective application arising out of the separation of sovereign debt from bank debt in so far as it applies to AIB and Bank of Ireland? How does the Taoiseach envisage that occurring? Will the ESM take over AIB and our shares in Bank of Ireland? If so, at what price? Is this is what is being discussed? The Minister for Finance seemed to be suggesting that last June but now he is saying he is not so sure we want the ESM owning our banks. From the Taoiseach's reply, I am getting the sense that this is not on either. It is unclear how this so-called retrospective dimension to the June deal will apply to our pillar banks. Will the Taoiseach clarify this?

Will the Taoiseach confirm, on the banking union, that we are not opposing a solution which may involve treaty change? I want a strong banking union. If it involves treaty change, I am prepared to support that and persuade the people it is in our best interest. I hope we are not negotiating on the basis that the last thing we want is another referendum on a treaty change, which seemed to be the position on the fiscal treaty.

Is the whole agenda of the banking union slipping? After the October Council meeting we were informed there had been major advances and we would have the heads of an agreement by January. Earlier the Taoiseach spoke about the first half of the year. The sense out there is that it will be well into 2013, if at all, before there is agreement on a banking union across Europe.

The EU budget looks to be in trouble, with significant reductions proposed. The European Council President, Mr. Van Rompuy, has proposed a significant reduction in the budget with a consequential reduction in the overall size of the Common Agricultural Policy, CAP, envelope. This would be serious for Ireland. In January, we will take over the EU Presidency. Will the Taoiseach outline his recent discussions with the French President, Mr. Hollande, on the CAP and how Ireland, France and others can work to ensure Irish farmers are not disadvantaged by the rather petulant approach adopted by the British Prime Minister and others who want to reduce the size of the European budget? It is incomprehensible for those outside Europe who feel that if anyone can do a stimulus programme it is Europe on a pan-European level. Despite the fact that the EU budget amounts to only 1% of Europe's overall GDP, it is actually going to be cut back, which sells the European citizen short in this crisis.

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