Micheál Martin (Cork South Central, Fianna Fail)
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I refer the Taoiseach to the joint statement of the Ministers for Finance from Germany, Finland and Holland on the separation of bank debt from government debt and the June European Council decision. By any reading of the statement, it must be seen as a grave disappointment and extremely depressing in terms of their interpretation and understanding of the June deal and their articulation of principles which will govern the so-called separation of bank debt from sovereign debt. Alarmingly, they describe the role of the European Stability Mechanism, ESM, in recapitalising banks as a longer term issue. They state, "Regarding longer term issues, we discussed basic principles for enabling direct ESM bank recapitalisation, which can only take place once the single supervisory mechanism is established and its effectiveness has been determined". It is not that it can take place when it has been established; we have to wait to see if it is effective before recapitalisation can take place. The statement continues:

The ESM can take direct responsibility for problems that occur under the new supervision, but legacy assets should be under the responsibility of national authorities ... the recapitalisation should always occur using estimated real economic values.

Has the statement come as a surprise to the Taoiseach and the Minister for Finance, Deputy Michael Noonan? Did he have any inkling at all that it was coming? Last week in the Dáil the Taoiseach confirmed to me that since the June meeting he had only met the Slovenian Prime Minister. He has not met the Dutch or Finnish Prime Minister or the German Chancellor. Clearly, the grass has grown under his feet since the June summit meeting. It speaks of an approach that he has adopted to avoid hands-on negotiations himself or direct engagement with other leaders who are key to the working out of the eurozone crisis. Will he commit to undertake an urgent diplomatic initiative with the Prime Ministers of the three countries to have a clear and honest articulation of what they are prepared to do to genuinely separate bank debt from sovereign debt?

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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We are over time.

Micheál Martin (Cork South Central, Fianna Fail)
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As Mr. Whelan said, the statement reinforces the vicious link between bank debt and sovereign debt.

Enda Kenny (Mayo, Fine Gael)
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First, it is important to appreciate the scale of the challenge the European Union and the eurozone faces. We are now in the fourth year of economic challenges and difficulties. The Deputy spoke of a clear and honest articulation. My job as Taoiseach and Head of Government is to deal with the other 26 EU Heads of Government when they meet in formal session. The decision taken on 29 June at the European Council has been articulated clearly:

We affirm that it is imperative to break the vicious circle between banks and sovereigns. The Commission will present proposals on the basis of Article 127(6) for a single supervisory mechanism shortly. We ask the Council to consider these proposals as a matter of urgency by the end of 2012.

The second element of the decision states:

The Eurogroup will examine the situation of the Irish financial sector with the view of further improving the sustainability of the well-performing adjustment programme. Similar cases will be treated equally.

As the Deputy will be aware, during the course of negotiations, statements can be made from different perspectives. Last Friday I had the opportunity to meet the Spanish Prime Minister, Mr. Rajoy; the Greek Prime Minister, Mr. Samaras, and the Italian Prime Minister, Mr. Monti. In each meeting we discussed the ongoing negotiations on the implementation of the 29 June decision. That is the position and the one taken by the Irish personnel involved in negotiations, including the Minister for Finance who has had intensive discussions with his counterparts who have been very helpful on Ireland's case. As far as I am concerned, on behalf of the Government, we want to see the clear decision and mandate given by the European Council implemented. That will be the focus and direction of our negotiations. It will be to follow through on the decision made to break the link between sovereign debt and bank debt, to allow for direct recapitalisation of banks and, in the case of Ireland, to improve its capacity to meet its debt problems. As the Deputy will know better than anyone else, it is a deal made in former years that we are trying to unwind.

Micheál Martin (Cork South Central, Fianna Fail)
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As the Taoiseach said in June, the European Central Bank and the European institutions imposed a deal on Ireland that was not acceptable at the time. The point is that the Taoiseach has not followed through on the June deal. This is a serious statement by three key players in resolving the eurozone crisis - Finland, Holland and Germany which are all seen as significant contributors.

Bernard Durkan (Kildare North, Fine Gael)
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It is just a position.

Joe Costello (Dublin Central, Labour)
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It is not a Council decision.

Micheál Martin (Cork South Central, Fianna Fail)
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The Taoiseach is correct in terms of his quotations from the summit communiqué. Equally, I have read the statement of the three Ministers for finance. The euro area summit statement, which the Taoiseach did not quote, states "when an effective single supervisory mechanism is established, involving the ECB, for banks in the euro area the ESM could, following a regular decision, have the possibility to recapitalize banks directly". It continues, "This would rely on appropriate conditionality".

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Could I have a supplementary question, please?

Micheál Martin (Cork South Central, Fianna Fail)
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In other words, it has been clear all summer, particularly from German sources and the Finnish and Dutch positions, that their interpretation of what the decision in June meant is entirely different from that of the Taoiseach and others.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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What is your supplementary question?

Micheál Martin (Cork South Central, Fianna Fail)
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Mr. Monti has been extremely active all summer-----

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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The Deputy is over time. Thank you.

Micheál Martin (Cork South Central, Fianna Fail)
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Mr. Monti has been extremely active all summer but the Taoiseach has not. He has not followed through on this-----

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Sorry, this is Leaders' Questions. Will you put a question, please, Deputy? You are over time.

Micheál Martin (Cork South Central, Fianna Fail)
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-----to make absolutely sure that this meant it would be what the Tánaiste said was a game changer.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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This is not the time for speeches. Will you put your question?

Micheál Martin (Cork South Central, Fianna Fail)
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I am asking a supplementary question. I should not be interrupted like this.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Your are over time and I am going to cut you off in one minute.

Micheál Martin (Cork South Central, Fianna Fail)
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I want to make the point. It is not a supplementary question. I have said this 100 times.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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It is a supplementary question and it is supposed to be.

Micheál Martin (Cork South Central, Fianna Fail)
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It is not, actually. According to Standing Orders, it is not. It is about raising matters.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Excuse me. There is provision for a supplementary question from a party leader for one minute.

Micheál Martin (Cork South Central, Fianna Fail)
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I am asking questions on a matter raised. It has nothing to do with supplementary questions. That is in Standing Orders.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Read the Standing Orders.

Micheál Martin (Cork South Central, Fianna Fail)
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I have read it and I respectfully suggest-----

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Deputy, you are over time.

Micheál Martin (Cork South Central, Fianna Fail)
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I object to the Ceann Comhairle's propensity to interrupt on a serious topical issue.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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You are over time.

Micheál Martin (Cork South Central, Fianna Fail)
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The Ceann Comhairle should not do that.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Sit down for one moment, please. I am not going to take any lectures from you, Deputy, about how I run this Chamber. You are over time. You had one minute to ask a supplementary question. I gave you notice. Please ask your supplementary question.

Micheál Martin (Cork South Central, Fianna Fail)
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I have no intention of lecturing the Ceann Comhairle. I ask to be allowed to ask the question without interruption, which the Ceann Comhairle has a propensity to do too much.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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You are now two minutes over time.

Micheál Martin (Cork South Central, Fianna Fail)
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It is a very serious issue facing the country.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Yes, and I have also granted a topical issue to your spokesperson on finance on this matter.

Micheál Martin (Cork South Central, Fianna Fail)
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I put the statement of the three finance Ministers to the Taoiseach. I asked whether he was surprised by any of this but he did not reply. Had the Taoiseach any inkling that this was occurring? I put it to the Taoiseach that there has been no follow-through on our side in respect of what we believed had been agreed in June and what the Tánaiste described as a game changer. It looks far from a game changer now.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Thank you. I call the Taoiseach.

Micheál Martin (Cork South Central, Fianna Fail)
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Commentators outside politics have raised the matter. We need honest articulation of what is actually happening.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Would you resume your seat, Deputy? Thank you.

Enda Kenny (Mayo, Fine Gael)
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Let me repeat what I said for Deputy Martin. The decision taken by the European Council was made by the Heads of Government of the 27 countries. There was a very clear decision in two parts: first, to break the vicious circle between sovereign and bank debt and allow for bank recapitalisation; and second, to reflect on the capacity of Ireland to meet its debts and provide that equal treatment be given. These were the two decisions about the eurozone and Ireland. Those decisions stand.

Deputy Martin's point is that these decisions are not being followed up. Let me tell Deputy Martin about the extent of negotiations involving Department of Finance officials and their counterparts across the board. They have been intense. Deputy Martin will appreciate that following the decision of 29 June, yields have come down from above 11% to less than 5%. They fluctuate, as we know. The Minister for Finance has followed through directly with his counterparts as recently as two weeks ago in Paris, Rome and Berlin. He has spoken to other Ministers for finance at the informal meeting in Cyprus.

Micheál Martin (Cork South Central, Fianna Fail)
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Did they say this in Cyprus?

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Would you please allow the Taoiseach to answer, Deputy?

Enda Kenny (Mayo, Fine Gael)
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When I spoke last Friday to three Prime Ministers directly involved - Prime Minister Monti, Prime Minister Rajoy and Prime Minister Samaras - they each gave an indication of their progress towards implementing the Council decision. This is not a decision of three Ministers or any other commentators. It is a decision made by the Heads of Government of the 27 countries of the European Union, reflecting the analysis of how to deal with the eurozone crisis. In particular, written into the statement of 29 June was the treatment to be given to Ireland. We will follow through on that statement and on that decision. That is the decision. It is clear and unequivocal; there is no resiling from that decision. Whatever opinions may be given about banking union, the Commission paper presented recently reflects clearly the decision of the European Council.

The challenge and, I suppose, the difficulty for Europe has always been to prove that one has followed through on decisions that were made. The decision of 29 June was not an opinion. It was not a theory or aspiration. It was a specific political decision made not just by Ministers but by the Heads of Government of the Union. It is set out clearly with no equivocation. I expect that decision to be implemented in full and, I hope, in the shortest possible time.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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From the very start, the Taoiseach's position in respect of bank debt has been astonishing. The Taoiseach never sought a write-down despite his pre-election commitments. The Government has paid unguaranteed, unsecured bondholders in full despite stating that not one red cent would be passing hands. Next week another €1 billion will go to unguaranteed bondholders in Allied Irish Banks. The Taoiseach's approach has been all smoke and mirrors, like the so-called promissory note deal of last March. Now, at the end of 18 months of bluff, bluster and hyperbole, it seems we are back at square one.

When the agreement was reached at the European Council summit meeting in June, the Taoiseach described it as a seismic shift. His colleague, the Tánaiste, said it was a game changer. The Taoiseach told the Dáil and the people that this deal, through the mechanism of the ESM, would lift the burden of bank debt from the Irish taxpayer. He also told us that the deal was retrospective. At that time, Sinn Féin said that was not what the Council communiqué stated. In fact, despite what the Taoiseach has said this morning, were he to go back and read the communiqué he would see it is full of equivocation and conditionality. The Taoiseach oversold the position last June. Then we had last night's statement from the finance Ministers. These are not just any finance Ministers; they are the finance Ministers of the AAA-rated countries Germany, Holland and Finland.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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A question, please.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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What they had to say was nothing short of a disaster for Ireland and I imagine that privately, the Taoiseach was probably angry with them. If he is not, he should be. The Taoiseach tells us that the pace of initiative and negotiation from the Department of Finance has been hectic since June. Will the Taoiseach confirm that the same Department of Finance welcomed the statement of these three finance Ministers last night? Why did it do that? What is the Government's strategy from now on to deliver the deal about which the Taoiseach has talked a good deal but which has failed to materialise?

Enda Kenny (Mayo, Fine Gael)
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I do not accept the premise of Deputy McDonald's question. In fact, the Sinn Féin Party does not want a deal, because it thrives on misery and failure. That is what Sinn Féin wants.

Peadar Tóibín (Meath West, Sinn Fein)
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The Taoiseach should get back to reality and back to this planet.

Enda Kenny (Mayo, Fine Gael)
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That is what it has always espoused. The vast majority of cases put forward by Sinn Féin do not stand up to any scrutiny. I do not accept the premise of Deputy McDonald's question.

We are going to continue the process we have been engaged in since the decision of 29 June - that is, to bring about implementation of the decision of the Heads of Government. Let me reaffirm to Deputy McDonald, as I did to Deputy Martin, that discussion and negotiation by officials from the Department of Finance and directly between the Minister for Finance and his counterparts, face to face, are ongoing. We have made substantial progress with regard to the promissory note, which is a very technical and complex issue to resolve because the deal done requires the country to pay more than €3 billion per year for ten years.

The strategy now is to continue to work to implement the decision of the European Council. If Deputy McDonald cannot see that this is clear, I will repeat the words of the summit statement: "We affirm that it is imperative to break the vicious circle between banks and sovereigns." Let me assure Deputy McDonald that this was and is a seismic shift compared to what applied in Europe before. This was never done before. It was contemplated but never enacted.

It was not only talked about on 29 June in Brussels; it was decided. It was decided, not by commentators or Ministers, but by the Heads of Government. I would remind Deputy McDonald that all Ministers for Finance are equal when they sit around that table.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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On the issue of misery, the Taoiseach has cornered the market. He has his joint Ministers for misery, Deputies Noonan and Howlin, seated beside him.

Robert Dowds (Dublin Mid West, Labour)
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Deputy McDonald would be in some misery if people were still calling on us for the referendum.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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No doubt the extent of their misery making will sadly become apparent in December with their budget announcement.

It does not seem to have occurred to the Taoiseach that the processes he describes, that he has embarked on and that he lauds so fully, are not working. The realpolitik of how this will play out is that, unfortunately, in the case of Ireland, because they failed to assert themselves, each of the Ministers is not equal. The fact of the matter, as the Taoiseach knows full well, is that when there is a joint statement from those three Finance Ministers it is a significant development.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Can I have Deputy McDonald's question?

Mary Lou McDonald (Dublin Central, Sinn Fein)
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This statement that the Taoiseach referred to was equivocal as regards Ireland. It only committed to re-examine our situation and, as my party pointed out to the Taoiseach at the time, very dangerously, it stated, "with a view ... [to] improving the sustainability...". There was no recognition of the unsustainability of the position that we are in.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Deputy McDonald is over time. Does she have a question?

Mary Lou McDonald (Dublin Central, Sinn Fein)
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In addition, it cites our "well-performing adjustment programme", that is, all the cuts that people are suffering. The Taoiseach has failed to make the case at a European level. That is the truth.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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I would be interested in Deputy McDonald's question.

Bernard Durkan (Kildare North, Fine Gael)
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Deputy McDonald did not even put the case.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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The Taoiseach should answer the question that I put to him. How is it, in the name of all sanity, that the Department of Finance headed by Deputy Noonan last night welcomed the statement from these three Ministers that told us, if not to drop dead, certainly to get lost?

Enda Kenny (Mayo, Fine Gael)
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Deputy McDonald missed the point of how serious this is in respect of the decision about the eurozone and Ireland. That decision was made by the Heads of Government and was clear and unequivocal, both in regard to the eurozone-----

Peadar Tóibín (Meath West, Sinn Fein)
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Historically.

Enda Kenny (Mayo, Fine Gael)
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-----and the breaking of the link between sovereign debt and bank debt, and specifically in regard to Ireland. She did not quote the decision clearly.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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I did.

Enda Kenny (Mayo, Fine Gael)
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It states, "with the view of further improving the sustainability of the well-performing adjustment programme".

Mary Lou McDonald (Dublin Central, Sinn Fein)
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I quoted that exactly.

Enda Kenny (Mayo, Fine Gael)
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If Deputy McDonald does not understand what "improving the sustainability" means-----

Peadar Tóibín (Meath West, Sinn Fein)
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It states, "with a view".

Enda Kenny (Mayo, Fine Gael)
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-----it means making it easier for Ireland to meet its debt requirements which were left behind from the wreckage of what happened previously.

Dessie Ellis (Dublin North West, Sinn Fein)
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And the Taoiseach picked up on.

Enda Kenny (Mayo, Fine Gael)
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The last line of that section of the decision was, "Similar cases will be treated equally." That is fairly clear.

It is not a question of the road that Sinn Féin wants to take, which is to have its brand of failure all over the place. This is a case of serious negotiation-----

Mary Lou McDonald (Dublin Central, Sinn Fein)
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That is failing.

Enda Kenny (Mayo, Fine Gael)
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-----at an intensive level about the promissory note------

Mary Lou McDonald (Dublin Central, Sinn Fein)
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Serious failure, that should be.

John Deasy (Waterford, Fine Gael)
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Deputy McDonald cannot say that. It is conjecture.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Sorry.

Enda Kenny (Mayo, Fine Gael)
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-----about the debt sustainability that we have to deal with and about the bigger question of the eurozone and the protection of the euro because Europe itself cannot thrive until this is dealt with. The decision of the Heads of Government was clear in that fundamental to that was to break the link between sovereign and bank debt.

The Commission, in accordance with this decision, published its proposals for banking union on a phased basis, for bank supervision, etc. Of course, there will be difference of opinion about that paper. The paper reflects clearly the decision of the European Council.

I would remind Deputy McDonald that in much of the comment that I have heard about this in the past number of hours the fundamental issue of the agreement has been missed. This was a decision of the European Council, of the Heads of Government. That decision stands. That decision will be implemented.

Shane Ross (Dublin South, Independent)
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I wonder if the House or the Government understands the seriousness of this statement last night and why it was issued. It seems that the three most powerful economic countries in Europe, which did not have to issue this statement, quite simply decided to send a message to Ireland and Spain that past debt - the Taoiseach appears to be talking about the future - of the type mentioned will not be eligible for any type of rescue. That means that the seismic shift, to which the Taoiseach referred and to which Ministers referred in June last, is now in reverse gear and the Government was sold a pup by Europe and passed it on to the Irish people. There is no other way of interpreting what happened and there is no point in pretending that this is good news. This is a disaster for the attempts to get out of debt, and particularly to rescue the pillar banks.

I ask the Taoiseach to answer this question because I think it is significant. I do not know the answer to this question and I am not asking it in a loaded way. Did he get knowledge of this statement in advance? Did someone from Berlin, Helsinki or The Hague ring him up or contact him stating that they were going to issue this statement which puts an end to his hopes-----

Bernard Durkan (Kildare North, Fine Gael)
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It does not.

Shane Ross (Dublin South, Independent)
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-----of getting the money that he hoped for as a result of the June communiqué?

The statement is important because it tells us what the relationship is between Ireland and Europe. This statement says that the policy, in particular that pursued in June, has failed but the policy in general is now under question. This particular statement was a statement which was unfriendly and unhelpful to Ireland and deliberately damaging to Ireland.

Enda Kenny (Mayo, Fine Gael)
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To ask the Taoiseach Deputy McDonald would be in some misery if people were still calling on us for the referendum. Deputy Mary Lou McDonald: [40667/12]

Enda Kenny (Mayo, Fine Gael)
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It was not only talked about on 29 June in Brussels; it was decided. It was decided, not by commentators or Ministers, but by the Heads of Government. I would remind Deputy McDonald that all Ministers for Finance are equal when they sit around that table.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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On the issue of misery, the Taoiseach has cornered the market. He has his joint Ministers for misery, Deputies Noonan and Howlin, seated beside him.

Robert Dowds (Dublin Mid West, Labour)
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Deputy McDonald would be in some misery if people were still calling on us for the referendum.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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No doubt the extent of their misery making will sadly become apparent in December with their budget announcement.

It does not seem to have occurred to the Taoiseach that the processes he describes, that he has embarked on and that he lauds so fully, are not working. The realpolitik of how this will play out is that, unfortunately, in the case of Ireland, because they failed to assert themselves, each of the Ministers is not equal. The fact of the matter, as the Taoiseach knows full well, is that when there is a joint statement from those three Finance Ministers it is a significant development.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Can I have Deputy McDonald's question?

Mary Lou McDonald (Dublin Central, Sinn Fein)
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This statement that the Taoiseach referred to was equivocal as regards Ireland. It only committed to re-examine our situation and, as my party pointed out to the Taoiseach at the time, very dangerously, it stated, "with a view ... [to] improving the sustainability...". There was no recognition of the unsustainability of the position that we are in.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Deputy McDonald is over time. Does she have a question?

Mary Lou McDonald (Dublin Central, Sinn Fein)
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In addition, it cites our "well-performing adjustment programme", that is, all the cuts that people are suffering. The Taoiseach has failed to make the case at a European level. That is the truth.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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I would be interested in Deputy McDonald's question.

Bernard Durkan (Kildare North, Fine Gael)
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Deputy McDonald did not even put the case.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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The Taoiseach should answer the question that I put to him. How is it, in the name of all sanity, that the Department of Finance headed by Deputy Noonan last night welcomed the statement from these three Ministers that told us, if not to drop dead, certainly to get lost?

Enda Kenny (Mayo, Fine Gael)
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Deputy McDonald missed the point of how serious this is in respect of the decision about the eurozone and Ireland. That decision was made by the Heads of Government and was clear and unequivocal, both in regard to the eurozone-----

Peadar Tóibín (Meath West, Sinn Fein)
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Historically.

Enda Kenny (Mayo, Fine Gael)
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-----and the breaking of the link between sovereign debt and bank debt, and specifically in regard to Ireland. She did not quote the decision clearly.

Mary Lou McDonald (Dublin Central, Sinn Fein)
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I did.

Enda Kenny (Mayo, Fine Gael)
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It states, "with the view of further improving the sustainability of the well-performing adjustment programme".

Mary Lou McDonald (Dublin Central, Sinn Fein)
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I quoted that exactly.

Enda Kenny (Mayo, Fine Gael)
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If Deputy McDonald does not understand what "improving the sustainability" means-----

Peadar Tóibín (Meath West, Sinn Fein)
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It states, "with a view".

Enda Kenny (Mayo, Fine Gael)
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-----it means making it easier for Ireland to meet its debt requirements which were left behind from the wreckage of what happened previously.

Dessie Ellis (Dublin North West, Sinn Fein)
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And the Taoiseach picked up on.

Enda Kenny (Mayo, Fine Gael)
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The last line of that section of the decision was, "Similar cases will be treated equally." That is fairly clear.

It is not a question of the road that Sinn Féin wants to take, which is to have its brand of failure all over the place. This is a case of serious negotiation-----

Mary Lou McDonald (Dublin Central, Sinn Fein)
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That is failing.

Enda Kenny (Mayo, Fine Gael)
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-----at an intensive level about the promissory note------

Mary Lou McDonald (Dublin Central, Sinn Fein)
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Serious failure, that should be.

John Deasy (Waterford, Fine Gael)
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Deputy McDonald cannot say that. It is conjecture.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Sorry.

Enda Kenny (Mayo, Fine Gael)
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-----about the debt sustainability that we have to deal with and about the bigger question of the eurozone and the protection of the euro because Europe itself cannot thrive until this is dealt with. The decision of the Heads of Government was clear in that fundamental to that was to break the link between sovereign and bank debt.

The Commission, in accordance with this decision, published its proposals for banking union on a phased basis, for bank supervision, etc. Of course, there will be difference of opinion about that paper. The paper reflects clearly the decision of the European Council.

I would remind Deputy McDonald that in much of the comment that I have heard about this in the past number of hours the fundamental issue of the agreement has been missed. This was a decision of the European Council, of the Heads of Government. That decision stands. That decision will be implemented.

Shane Ross (Dublin South, Independent)
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I wonder if the House or the Government understands the seriousness of this statement last night and why it was issued. It seems that the three most powerful economic countries in Europe, which did not have to issue this statement, quite simply decided to send a message to Ireland and Spain that past debt - the Taoiseach appears to be talking about the future - of the type mentioned will not be eligible for any type of rescue. That means that the seismic shift, to which the Taoiseach referred and to which Ministers referred in June last, is now in reverse gear and the Government was sold a pup by Europe and passed it on to the Irish people. There is no other way of interpreting what happened and there is no point in pretending that this is good news. This is a disaster for the attempts to get out of debt, and particularly to rescue the pillar banks.

I ask the Taoiseach to answer this question because I think it is significant. I do not know the answer to this question and I am not asking it in a loaded way. Did he get knowledge of this statement in advance? Did someone from Berlin, Helsinki or The Hague ring him up or contact him stating that they were going to issue this statement which puts an end to his hopes-----

Bernard Durkan (Kildare North, Fine Gael)
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It does not.

Shane Ross (Dublin South, Independent)
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-----of getting the money that he hoped for as a result of the June communiqué?

The statement is important because it tells us what the relationship is between Ireland and Europe. This statement says that the policy, in particular that pursued in June, has failed but the policy in general is now under question. This particular statement was a statement which was unfriendly and unhelpful to Ireland and deliberately damaging to Ireland.

Enda Kenny (Mayo, Fine Gael)
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There was no knowledge about the statement in advance. Speaking to three prime ministers last week, Prime Minister Rajoy from Spain, Mr. Samaras from Greece and Prime Minister Monti from Italy, each one of them, when we discussed the progress being made on the implementation of the Council decision and their own country's position, was clear that this decision of 29 June is what must be implemented for the protection of the euro, for the development of the eurozone and, in particular, in our case, reflecting the decision made in regard to Ireland being named as one of two countries mentioned in the decision.

The statement last night is from three Finance Ministers of 27. The June decision was of the 27 Heads of Government. As everybody will be aware, the Minister for Finance, Deputy Noonan, in his dealings with this counterparts, has received strong political support for the difficult decisions and negotiations that are required to unwind the deal that was done previously and to improve Ireland's debt sustainability as per the decision of 29 June.

Deputy Ross will be aware of the municipal elections in Finland. He will be aware that a Government has not yet been formed in the Netherlands. He will also be aware of the assistance given by Minister Schäuble to the Minister, Deputy Noonan, in his discussions about the promissory note and the technical difficulties there, and his association with the ECB etc.

To be clear about this, there was no information about the statement in advance. The decision of 29 June is clear and unequivocal. Our efforts, both as a member of the eurozone and the Union, are to implement that decision to protect the eurozone and the euro, and to improve Ireland's debt sustainability which is mentioned specifically in the decision of 29 June.

Shane Ross (Dublin South, Independent)
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I thank the Taoiseach for the straight reply. It is most unfortunate that the Taoiseach did not get knowledge in advance because Ireland and Spain, in particular, are the two nations most affected by it. It seems that is symptomatic of the way Ireland is now treated in Europe, as the good poster boy who gets nothing in return. The least we could have got was that knowledge. We are getting nothing back from Europe for being good Europeans. We are not even getting information in advance about matters which affect our vital interests.

These are not three out of 27 Finance Ministers. These are the three most economically powerful nations. These are three triple A-rated nations. These are three people who will dictate the pace in the next European summit to the other nations.

Perhaps the Taoiseach could comment on this.

This is not just about scoring political points. Today Reuters states it now appears likely that Ireland will remain saddled with vast amounts of bank debt that will make it harder for the Government to solve banking problems and get the country's finances in order. That is an international, independent judgment on the State.

Bernard Durkan (Kildare North, Fine Gael)
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It is not independent.

Shane Ross (Dublin South, Independent)
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I ask the Taoiseach to comment on it and respond to what Deputy Mary Lou McDonald said and tell us if he agrees with the farcical statement from the Department of Finance that it welcomes the statement made elsewhere in Europe. That is utter nonsense and if it is the case, someone should be fired from the Department immediately. This is the most damaging statement on Ireland to come from the European Union in living memory.

Enda Kenny (Mayo, Fine Gael)
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I do not agree that this country has not received substantial support from the European Union during the years. When the people made a clear, strong and welcome decision on the fiscal stability treaty, this was followed shortly thereafter by the strongest delegation from the European Investment Bank that had ever come here, with a clear willingness to commit to further investment through that source.

I will not decry the appointment of a Minister of Finance by any Prime Minister elsewhere in Europe. There are 27 involved and there is a statement from three of them. I return to the point that I believe in the political system being able to deliver. As I said to Deputy Micheál Martin, if there has been a fault on the part of the European Union in respect of its citizens - next year is the year of the citizen - it has been the failure to demonstrate the capacity to follow through and implement decisions made. The decision of 29 June was clear and unequivocal in two respects - in the protection of the euro and the eurozone and the direct recapitalisation of banks, therefore breaking the link between sovereign debt and bank debt, and second, in improving Ireland's debt sustainability to give equal treatment where others received a deal. On these two issues, the Minister for Finance, officials and I, at Heads of Government level, will follow through resolutely and diligently. It is too important to have Heads of Government make a clear and unequivocal decision and not to have it implemented. Of course, when politicians begin to negotiate on these issues, we have different points of view. However, there is no resiling and no going back from the clarity of the decision to break the link and improve Ireland's debt sustainability. That is where we will continue to make our efforts. As Commissioner Rehn pointed out, he would like to have the issue dealt with by the end of October. The Minister for Finance has made the point that, realistically, that is not achievable and that it is important to get the right deal. In that sense, we continue to return to the foundation stone, namely, the clarity of the decision of 29 June made by the Heads of Government. That is what is important and it needs to be implemented.