Michael Creed (Cork North West, Fine Gael)
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Question 72: To ask the Minister for Finance if he and the Governor of the Central Bank have had any discussions with the European Central Bank on their concerns regarding certain provisions of the Credit Institutions (Stabilisation) Bill 2010; and if he will make a statement on the matter. [1305/11]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The legal drafting of the Credit Institutions (Stabilisation) Bill by the Office of the Chief Parliamentary Counsel could not begin until the conclusion of the negotiations with the IMF, the European Central Bank or ECB, and the European Commission which resulted in the programme agreement. Once a near final draft of the Bill was available, this was shared with the European Central Bank which was aware that the provisions in the Bill were required on an urgent basis to effect the restructuring of the banking sector. While the timeframe available for the consultation process was short, in advance of the circulation of the draft Bill to the ECB, my officials were in close contact with ECB services to facilitate an efficient and speedy consultation. It should be noted that the ECB welcomed the broad powers provided for in the Act.

The ECB opinion was received after the Bill had passed all Stages in the Oireachtas. My Department is carefully considering the ECB opinion, working closely with the Attorney General. I will be responding formally to President Trichet shortly on the main points raised in the opinion. In advance of this, it would be inappropriate for me to comment on the detail of the ECB's opinion although I believe that the main legal issues raised in the opinion can be fully addressed.

Regarding any discussions that the Governor and the Central Bank may have had on the content of the Bill with the ECB, the Deputy will note that I would not be a party to these discussions and I am not, therefore, in a position to make any comment on them. It is important to make the point that, as I highlighted in my speech on Second Stage, the fundamental purpose of the legislation was to ensure that the national authorities had the legislative tools to achieve the restructuring of the banks which we are committed to under the terms of the joint programme agreement with the EU and IMF, agreed in consultation with the ECB.

Regarding the opinions on the independence of the Governor and the Central Bank, section 5 of the Act provides that nothing in the legislation affects any obligation arising under the EU treaties, and protects the treaty principle of central bank independence. In regard to the position of the ECB as a creditor, which was the main focus of the opinion, I would have to take account of the position of the ECB when forming an opinion regarding the effect of orders and other obligations of the relevant institutions under section 61. The Central Bank of Ireland will be closely involved in the planning and decision making on any transfer measure.

As regards the concern raised by the ECB on the constitutionality of the Act, I believe this is not within the competence of the European Central Bank.

Brian Hayes (Dublin South West, Fine Gael)
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Despite the Minister's sweet words to the House in response to the ECB's views on this Bill around Christmas time, not since the time of the Third Reich was a Bill so radically put through a democratic parliament. Is the Minister not stung by the clear and deliberate criticisms that have been levied at him and the Government for the manner in which the legislation was put through the House, as well as its provisions? Am I correct in saying that, to date, the Minister has not formally responded to the ECB's stated opinion? What is causing the delay?

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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There is nothing unusual in this. The ECB expresses an opinion on every item of legislation relevant to banking.

Damien English (Meath West, Fine Gael)
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I wonder why.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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The member state concerned then comments on the opinion. We are a sovereign State and this is a sovereign Legislature, which acts in the best interests of the Irish people.

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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I have already indicated in my reply, which was not a sweet comment, that the European Central Bank has no competence in judging the constitutionality of measures in this State. The opinion was out of order in that respect, although the proper constitutional procedures were followed. As the Deputy knows, the President, rightly within her functions, convened a meeting of the Council of State and ultimately signed the legislation.

As regards the other matters of concern raised by the European Central Bank, which related to its position as a creditor and the ECB's independence, these matters are adequately covered by the legislation.

Joan Burton (Dublin West, Labour)
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Is the Minister's reply not reflective of the hubris with which the Fianna Fáil Government has dealt with the EU over the last 13 years when we were cock of the walk? Does the Minister recall that the ECB is currently extending credit facilities of €100 billion at 1% to Irish banks? Many people in the ECB now seem to be taking the view that perhaps that could be pushed over to the Regling fund at the Minister's wonderfully negotiated rate of 5.8%. The Minister is constitutionally correct in saying that the ECB has no role concerning legislation in Ireland. From a negotiating viewpoint, however, given that we are getting €100 billion at 1% for our banks but our citizens will pay 5.8%, does the Minister not want to mend his fences with Mr. Trichet?

Brian Lenihan Jnr (Dublin West, Fianna Fail)
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No. What I made clear was that certain valid concerns were raised by the European Central Bank in the opinion, and those concerns are already addressed or can be addressed in the correspondence with the president. I indicated to the House, as I hope any Irish Minister would, that the ECB does not have a function in the constitutional validity of legislation enacted in this House. That is the position.