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

I propose to take Questions Nos. 6, 9 and 14 together.

As the Deputies will be aware, the European Council in October 2012 reaffirmed that the “the Eurogroup will draw up the exact operational criteria that will guide direct bank recapitalisations by the European Stability Mechanism, ESM, in full respect of the 29 June 2012 euro area Summit statement. It is imperative to break the vicious circle between banks and sovereigns.”

The Taoiseach and Chancellor Merkel spoke together following the October 2012 European Council and discussed the unique circumstances behind Ireland’s banking and sovereign debt crisis and Ireland’s plans for a full return to the markets. They reaffirmed the commitment from 29 June to task the Eurogroup to examine the situation of the Irish financial sector with a view to improving further the sustainability of the well-performing adjustment programme. They recognised, in this context, that Ireland is a special case and that the Eurogroup will take that into account.

While the State’s successful disposal of the Bank of Ireland contingent capital notes earlier this year is further evidence of investors’ confidence in Ireland and demonstrates that there is a market appetite for Irish assets, the Government is still heavily involved in drawing up the operational criteria that will guide direct bank recapitalisations by the European Stability Mechanism in full respect of the 29 June 2012 euro area summit statement.

In this regard, the European Council stated on 14 December 2012 that “once an effective Single Supervisory Mechanism (SSM) is established, the ESM will be able to recapitalise banks directly. An agreement on the operational framework supporting this possibility, including the definition of legacy assets, should be agreed as soon as possible in the first semester of 2013”.

Ireland continues to be fully engaged in this process within the Eurogroup and among Heads of State and Government. Furthermore, officials from my Department also attend technical meetings with the ESM and other member states. Discussions remain ongoing in regard to this issue and no conclusion has been reached. Notwithstanding these discussions, the Government will also continue to explore any market opportunities for our remaining banking assets to get a return of any of the sums used to bail out the banks.

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