Enda Kenny (Mayo, Fine Gael) | Oireachtas source

The Deputy asked two questions in respect of whether the Cabinet committee considered recapitalisation and the decision taken by the European Council in 2012. The committee does not reflect in detail on these matters as they are dealt with by the Department of Finance. Notwithstanding the comments made here, including the statement by Deputy Higgins that nothing had happened in two and a half years, the facts are that the promissory notes have been replaced; the former Anglo Irish Bank and Irish Nationwide Building Society are being liquidated; the minimum wage has been reinstated; the interest rate on European Union funds has been reduced, which will save taxpayers €9 billion; the EU loans to Ireland have been extended; and agreement has been reached to allow half of the proceeds from sales of State assets to be retained for investment in jobs.

Following on this detailed work, the Eurogroup agreed that retrospective recapitalisation may be decided on a case-by-case basis in line with the decision that was made on 29 June 2012. The euro area Heads of State and Government confirmed this position and mandated EU finance Ministers to prepare an operational framework to deal with this matter by mid-2013. The European Stability Mechanism direct bank recapitalisation instrument, the technical mechanism that provides for this, has been approved. We have succeeded in having specific provision for retrospective recapitalisation included in the main features of the operational programme, which states: "The potential retroactive application of the instrument should be decided on a case-by-case basis and by mutual agreement." This agreement gives Ireland the option of applying to the European Stability Mechanism for a retrospective direct recapitalisation of the Irish banks. An application can only occur, as Deputy Higgins is well aware, after the single supervisory mechanism becomes operational, which is most likely to occur towards the end of 2014. Any application for retrospective recapitalisation will be considered in light of the potential returns to the State from alternative options for realising the value of the State's bank holdings. The agreement on the single resolution mechanism between member states will protect European taxpayers from the costs of bank failures.

Deputy Higgins should note that of the total national debt of €203 billion, €40 billion relates to banks and the cost of servicing this part of the debt is now less than €1 billion. Sometimes figures are used to suggest that all the national debt is related to banks whereas bank related debt accounts for €40 billion of the total of €203 billion.

The position in Gaza is exceptionally difficult. I happened to visit Gaza a number of years ago with other public representatives and I recall that an Irishman, Mr. John Ging from Dublin, was in charge of UN operations in Gaza in respect of providing water, education and food services. Mr. Ging did an extraordinary job.

I agree with Deputy Higgins that rockets are indefensible and any death is one death too many. This issue will be discussed at the European Council meeting on Wednesday and Thursday. Egypt has made a proposition that may or may not be acceptable to some of those around the table. No more than in any other conflict, the current conflict will not be concluded by aggressive military action. It must be concluded by an agreement on a set of conditions for a ceasefire that allows people to get on with their lives. People in this country, where 3,000 people lost their lives over a long period, know this only too well. Peace was concluded with the Good Friday Agreement when people were in a position to talk, negotiate and discuss. It was a fragile peace in the beginning and while it remains fragile in many ways, it has been kept on track.

The Cabinet committee does not deal with the detail of these issues. The Minister of State with responsibility for European Affairs deals with these issues as they arise at European level. They also come before the European Council meeting at which regular reports and updates are provided by the High Representative and I expect this will be done again this week.

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