Dara Calleary (Mayo, Fianna Fail)
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7. To ask the Minister for Finance if he will submit a technical paper to the European Stability Mechanism, ESM, and the European Commission on the subject of bank debt relief for Ireland; and if he will make a statement on the matter. [28543/14]

Dara Calleary (Mayo, Fianna Fail)
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It has been two years since we had the so called "game changer". How is the game is going?

Michael Noonan (Limerick City, Fine Gael)
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As the Deputy is aware, the euro area Heads of State or Government, HoSG, agreed in June 2012 that "it is imperative to break the vicious circle between banks and sovereigns", and that when a single supervisory mechanism, involving the European Central Bank, ECB, is in place and operational, the ESM, could recapitalise banks directly. On 10 June 2014, the euro area member states reached a preliminary agreement on the operational framework for the ESM's direct recapitalisation instrument, DRI. This includes a specific provision regarding the retroactive application of the instrument. Therefore, the agreement, that we were active in negotiating, keeps open the possibility of applying to the ESM for a retrospective direct recapitalisation of the Irish banks, should we wish to avail of it.

We now require a decision by mutual agreement of the ESM board of governors to create a new ESM instrument in accordance with Article 19 of the ESM treaty and the aim is to have this process completed by November this year, subject to completion of national approval procedures. This would allow the ESM DRI to come into effect once the single supervisory mechanism is in place and operational, which is expected to be in November of this year.

Regarding retrospective recapitalisation, the preliminary agreement states that the potential retroactive application of the instrument should be decided on a case-by-case basis and by mutual agreement. However, it will not be possible to make a formal application to the ESM for retrospective recapitalisation before the instrument is in place. It would, therefore, be premature to make any submission, be it a technical paper or otherwise, in advance of the instrument being in place. My Government colleagues and I ensure that Ireland's case for retrospective direct recapitalisation is made at all levels as appropriate.

Dara Calleary (Mayo, Fianna Fail)
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The talk of a technical paper regarding recapitalisation came from the Minister and the Government. I take it from the response that there is not, and never was, a technical paper. It is ironic that the man who dubbed this decision a game changer is about to leave the pitch before anything substantial has been achieved. We have moved very little in the two years, specifically relating to Ireland and our banks as opposed to setting up a general financial instrument within the ESM.

Michael Noonan (Limerick City, Fine Gael)
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The Deputy and his Fianna Fáil colleagues are like the arsonist who set fire to the building and blames the fire brigade for not putting it out fast enough. That is the position into which they have argued themselves. We would not have to address these issues were it not for decisions taken by a Government in which the Deputy participated. I do not want to recite the history. While the technical instrument should be in place by November, it is subject to ratification by member states. If it is in position by November, it leads us to the next step of deciding when to time an application for retrospective recapitalisation. There is no way of advancing the timeline beyond that because it is subject to the international agreement of all the member states.

Dara Calleary (Mayo, Fianna Fail)
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The Minister has had three years to put out the fire, and while he has been talking about putting it out, he has not put any water on it. The talk about putting out the fire and these great, grand actions comes not from this side of the House but from the Minister's retiring colleagues. We were told it was a game changer and a big deal. The Minister had said a technical paper was being prepared and I understood the Minister for Social Protection, Deputy Burton, was examining a paper submitted by Professor Karl Whelan on the issue. Although we were told there was a strategy in place, it seems it is a wait and see situation. Does the Minister anticipate that next year, on the third anniversary of the deal with the European Council, we will be any further down the road or have any further idea of when we will be recapitalised?

Michael Noonan (Limerick City, Fine Gael)
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I am not in the fortune telling business. I laid out for the Deputy what the agreement was in Europe. While there is an agreement that the particular instrument required will be put in place by November, it is qualified because it is subject to ratification by the member states. Some of them can ratify it by a Minister signing an order while others must go through a parliamentary process. On the assumption that it is completed by November, which is the commitment, we will see then what is our next move.

Pearse Doherty (Donegal South West, Sinn Fein)
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I appreciate the Minister is not in the game changing, I mean, the fortune telling business. That was probably a Freudian slip. However, when he was announcing all this game changing stuff on the radio programme "Today with Seán O'Rourke", he said he expected it to be concluded by November 2012. While the Minister cannot make an application until November at the earliest, and possibly later, is any work going on in the Department, such as a technical paper being prepared or options being examined? Has the Minister commissioned experts in the Department or the Central Bank to examine the issue and prepare for an application the Minister has said he will make?

Michael Noonan (Limerick City, Fine Gael)
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Within the Department of Finance we have a finance unit which looks after the State's assets across the system, which are in the control of the Department of Finance, particularly the State's holdings in the different banks. When one thinks through the recapitalisation retroactive option, it was always envisaged that there would be some form of exchange of shares in the banks for capital upfront, and that this capital would be used to reduce the debt. While the technical work has been done on it, there is a question of value, price and judgment in all these matters.

I certainly do not wish to talk ourselves into a position where just as the banks are becoming valuable, we give them away for the second time.