Pearse Doherty (Donegal South West, Sinn Fein) | Oireachtas source

There is no doubt that the statement on 29 June offered an opportunity for Ireland to secure the getting back of the money we invested in the pillar banks, which is to the tune of more than €25 billion. Unfortunately, I note from media reports, an editorial in the Financial Times the day before yesterday and an article in The Wall Street Journal yesterday, that it is claimed there is a potential row back from that position in Europe at this point in time. The writer of the editorial claimed to have seen a Commission document which indicated that recapitalisation of banks across Europe in the future would be jointly capitalised by the ESM and member states up to a certain threshold, or the other option is that losses of the ESM would be guaranteed by the member states, which would not be beneficial or would definitely be a worst case position than the statement on 29 June.

The Wall Street Journal took it further yesterday and claimed that the leaders have nearly unanimously agreed in the first part of this year that in terms of the recapitalisation of any banks in the future the first tranche of it, up to 4.5% of core tier one capital ratio, would be done by the member states and afterwards it would be jointly done by the ESM to a certain proportion.

Has the Minister seen the Commission's document? Is he concerned that there is a potential row back on the commitment given on 29 June, or about the difficulties that would place on him and the Taoiseach to try to secure this deal and the impact that could have on our re-entering the markets? I agree with him that the markets have priced in the deal. The 29 June statement was significant for the markets and we have seen our bond yields decrease as a result of that.

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