Enda Kenny (Mayo, Fine Gael) | Oireachtas source

I cannot recall if I asked that specific question. However, I did raise the issue of surveillance, bugging and the protection of private data.

The Deputy also referred to breaking the link between sovereign and bank debt and what Ireland was looking for in that regard. He is aware that Ireland was first over the edge, with no tools or mechanisms to deal with it. We had to borrow €64 billion, half of it gone with the promissory note agreement, with the support of the European Central Bank. European banking union, with a single supervisory mechanism, SSM, and a single resolution mechanism, SRM, are all part of the process leading to the point where the Council decision of 29 June 2012 to break the link and the possibility of recapitalisation directly of banks can be followed through. Up to €80 billion has been left aside out of the ESM, European Stability Mechanism, to deal with the concept of direct recapitalisation. We cannot make any case on this until all of these facilities are in place, which should apply from November this year. The European Presidency and the Parliament came to an agreement on the single resolution mechanism, its regulation and the IGA, intergovernmental agreement, on 20 March. The text of the SRM was further refined in a trilogue on Friday, 21 March. The SRM regulation will be submitted to COREP, Common Reporting, on 26 March. It is expected that the IGA will be finalised through the intergovernmental conference as quickly as possible. Most people did not expect this to happen because they had doubts about how effective the Greek EU Presidency would be. Greece was commended for its diligence in getting it across the line.

Mutualisation will occur over eight years, with contributions also taking place over eight years, with 40% in year one, 20% in year two and the remainder in equal instalments over the remaining years. It is understood contributions will follow a linear trajectory from year one, 12.5% each year, until the target is reached at the end of eight years. it was originally meant to be over ten years.

The European Central Bank will be the supervisor within the SRM. The supervisory board should be able to assess whether a credit institution is failing or is likely to fail. Therefore, in its executive session it may determine whether resolution is required, but only after having previously informed the ECB about its intention and only if the ECB, in three calendar days after receiving such information, does not make such a decision.

There is also the role between the Council and the Commission in what is determined by the Meroni doctrine. The Council maintains a role, but it is limited to the existence of a public interest and the use of the fund. The Council can only approve or object to a Commission proposal without actually amending it. The role of the plenary session in the board has been limited, depending on a certain threshold being reached. The plenary session may only adopt a resolution scheme if in the support of the fund in that specific resolution action is required above the threshold of €5 billion for which the weighting of liquidity support is 0.5%. It can also evaluate the application of the resolution tools. The legal basis for this is Article 114 of the Treaty on the Functioning of the European Union.

Ireland is looking for the structure to be in place where we can make a case, based on the decision of 29 June, for recapitalisation of the banking system. This is still very much on the table. I was glad to see these other sections being put in place which will allow the complete structure for banking union to be followed through. It is expected that the Parliament will approve it in the next few weeks.

Banks in the member states will contribute to the SRM fund. This reflects the fact that in the integrated financial markets any financial support to resolve a bank issue benefits financial stability and the health of other banks in all member states. These contributions will be calculated in a way that reflects different types of bank and their business models. Contributions will be raised annually and will be pro rata through the amount of liabilities, excluding own funds and covered deposits of all the institutions authorised in participating member states. Contributions will also be risked-based, reflecting different risks inherent in different types of banking activity. Progress was actually made and we do expect it to be finalised, with the structures being in place by mid-summer. We can then deal with the negotiations on the decision of 29 June.

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