Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

I read the article on the front page of the Financial Times, to which the Deputy referred, I have not seen the article in The Wall Street Journal. We have had no indication that there is such a Commission paper. When I spoke to Commissioner Rehn last week in Dublin Castle and discussed these matters with him informally he did not indicate to me that there was such a paper. My officials who have served on various subgroups in Europe have not come across any reference to it either. I do not know what the Financial Times source is or what has led to the speculation. One must be always vigilant in these matters but I have no information which can confirm that. I have had conversations very recently with Commissioner Rehn and there was no indication that there was a change of policy.

As the Deputy is probably aware, the last ECOFIN meeting before Christmas concluded in passing the framework for the single supervisory mechanism and the next step is that it will go to the European Parliament and then it can be adopted as the legal document for the supervision. Once that is in place, that is the prime condition for any movement by the ESM to invest in banks directly. The Deputy may also have noticed that the ESM has raised money on the markets. It is such a strong organisation that anyone who wanted to invest in the ESM had to pay a commission. In other words, the interest rate was a minus interest rate. Not only were investors getting money at zero rates but they had to pay a small premium to ensure that their investment was secure in the ESM. That will show how strong a credit rating it has. There is a whole lot of detail to be worked out on how it would be managed if the ESM were to invest directly in recapitalising banks and I referred to that in my answer. A subcommittee of a committee is working on this at present and going through all that detail. I have not been briefed in the past 48 hours on that. I will be in Brussels on Monday and Tuesday, the Eurogroup will meet on Monday and ECOFIN will meet on Tuesday, so I may get a further update there but there is nothing particular on the agenda that directly refers to this.

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