Enda Kenny (Mayo, Fine Gael) | Oireachtas source

The Deputy has raised this issue on many previous occasions and I have made the point that it is a testament to the resilience of the Irish people and the continued support of our EU partners that this country has returned to a position in which it is able to borrow money in a sustainable way and is not blocked from the markets that we were able to access previously. Having delivered on all of the commitments and exceeded targets over the three years of the programme, it was and remains a key priority of the Government to ease the bank burden on Irish taxpayers and clean up our banks as we make our way to economic recovery. In that sense, banks have been recapitalised and restructured. IBRC was liquidated and the promissory notes replaced with long-term bonds in order to dramatically reduce our market funding requirements. Interest rate reductions on our loans were achieved, not just here but in other places. Agreement was reached with our eurozone partners for the repayment of our EFSM and ESF loans to be extended by seven years. Those steps have had the effect of stabilising our financial system and reversing the outflows of deposits and other funds that have crippled this economy for quite a number of years.

As regards recapitalisation, the European Stability Mechanism, ESM, a direct recapitalisation instrument, was agreed in principle in 2012. There is a limit of €60 billion on the total amount of ESM resources available for direct recapitalisation of institutions. Should the ESM use its direct recapitalisation instrument, it would, as a rule, acquire common shares in the beneficiary institution.

Circumstances have improved dramatically since then, and the ESM is not the only option open to us to recover the money provided to recapitalise our banks. Investors are now willing to support Irish banks again and the market value of our investments has improved accordingly.

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