Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

Conditions are benign now, and if those conditions persist the Minister's decision will have been right and we will not need a precautionary credit line. The Minister has acknowledged that the decision was finely balanced, with arguments on both sides. Two issues that arise as a result of our not applying for a precautionary credit line are important. One is that we will be excluded from the ECB's outright monetary transactions, OMT, policy, the ultimate backstop in the event that we need it. The other is to do with the failure to reach an overall agreement on the single resolution mechanism at last week's ECOFIN meeting. This means that if next year's stress test shows a capital shortfall, particularly in the case of AIB and Permanent TSB, the national authority - the State - would come in ahead of the ESM to plug that hole. Neither the Minister nor I know whether that capital shortfall could happen. Did the Minister get a feel for the conditions that would have applied in the event that we had sought a precautionary credit line, to which we will not now be subject by virtue of our decision not to seek such a credit line?

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