Thomas Pringle (Donegal South West, Independent) | Oireachtas source

One of the main issues coming down the line is banking union, which has been mentioned in passing in the House on a few occasions. It is interesting to note that in his communiqué to the Council, the President of the European Council, Herman Van Rompuy, devoted two sentences to banking union. Banking union will be vitally important for this country in the future given the stress tests and asset quality reviews currently being undertaken by the European Central Bank. I take it that the banks in this country that are part of the review will also be covered by the single resolution mechanism, SRM, and the banking union when it comes into play next year. It is not clear what the role will be for national governments in terms of banking union in the event of capitalisation being required. The ECB has stated that member states should make all appropriate arrangements, including national backstops. Where will the national backstop be in the priority that will be applied under the banking union in terms of where the recapitalisation will come from?

I note that the Taoiseach said in his contribution that the European Council agreed that member states would make all appropriate arrangements. Who decides what are appropriate arrangements, and will depositors be brought in for recapitalisation? Is it an appropriate arrangement that the taxpayer will have to become involved in recapitalisation before the ECB steps in? These are key questions on which decisions must be made and on which we must be clear in this country before we finalise the introduction of the banking union. It goes to the heart of what the Government has said with regard to the famous statement of June last year in which we got a mention in the communiqué about the legacy recapitalisation we did in order to save the euro and whether that will be fulfilled. Personally, I do not believe it will be. The Government is dragging out the issue over the next year and eventually we will see that it will not happen. The so-called national backstops will probably come into play before we get any sign that the ESM might be used. The issue is vitally important and must be clarified in the national interest. It must be clarified in the House and we must have a full debate on the matter to ensure that we and the Irish people know exactly what is involved and what is being entered into.

I accept that the decision has been put back to December, but there was some discussion on the strengthening of economic policy co-ordination and reform contracts or competitive packs, as they were called during the election campaign in Germany. The Commission will provide a first overview of the implementation of country-specific recommendations and this will be the basis for further monitoring and implementation. Work will be carried forward to strengthen economic policy co-ordination with the objective of taking decisions in December. It appears that we will have to enter into binding contracts that have been dictated by the Commission and the ECB on our economic policy. When will we regain economic sovereignty if we exit the bailout on 15 December, if we are being forced to enter into so-called binding contracts?

Reference has been made to a solidarity mechanism. How will we contribute to it? What will it be and how will it be funded? Will it be available to us? I seek clarification on those issues. In terms of the reform contracts, competitive packs or whatever they will be called in the future, the Commission stated that it is fair to assume that the kind of beefed-up supervision and enforcement envisaged would most likely require EU treaty change. Will the Government enter into such an arrangement for a change to EU treaties without reference to the Irish people? It is interesting to note that it has been reported that the Constitutional Affairs Committee of the European Parliament sent a confidential document to get legal advice on how the European Union could participate in national referendums. If we have a referendum on the issue in the future, will we see the European Union campaigning in this country? Under the Constitution, such decisions are supposed to be for the sovereign people to make.

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