Pat Casey (Fianna Fail) | Oireachtas source

I welcome the Minister and thank him and my colleague, the Minister, Deputy Michael McGrath, for a very exceptional budget, at the heart of which was the common good and fairness. The poorest 30% of families will see the greatest gains from Tuesday's budget. That goes to show that fairness was at the heart of that budget.

The Bill before us today is rather technical. We will be supporting this Bill, which ratifies the amending agreements on the European Stability Mechanism treaty, the Single Resolution Fund and the intergovernmental agreement. The agreement reforming the European Stability Mechanism, ESM, treaty signed in January is a crucial stepping stone on the path to reinforcing economic monetary union and is a significant accompaniment to our efforts to support economic recovery which will boost confidence in the euro area's ability to quash crises before they escalate. All euro area members are required to ratify both amending agreements in order to implement the Eurogroup agreement from November 2020 with regard to the ESM treaty reforms and the introduction of the common backstop two years ahead of schedule, which has to be welcomed.

Most of the issues have already been covered but the agreement will make the ESM more effective and flexible, including by providing a common backstop to the Single Resolution Fund by means of a credit line at the beginning of 2022 which is, as I have said, two years ahead of schedule. This decision, taken by the Eurogroup, regarding the early introduction of the backstop recognises the considerable efforts by the European banking sector, supervisors and member states in significantly improving all risk reduction indicators in recent years. The common backstop will help to ensure that banking failure does not harm the broader economy or cause financial instability. It will be financed by contributions from the banking sector and not the taxpayer, as the Minister has outlined, thereby reducing the link between banks and sovereign states in the banking union. The ESM treaty reform will expand the ESM mandate with a new task and responsibility. It will equip it with more accessible precautionary credit lines and give it a stronger role in financial assistance programmes for crisis prevention. Together with the early introduction of the common backstop, this will help to ensure the euro area is capable of handling challenges as they arise.

The European banking sector is in a far stronger and more resilient position today than it was ten years ago. This was never more obvious than during the pandemic crisis, when it was able to maintain financing to the economy. We have benefited from that. I could probably list a page's worth of financial supports this Government has been able to give society and businesses to help them survive the pandemic but this was all made possible by the work of the banking union since 2021. The decisions being enacted now are another crucial step in this regard. With the ESM treaty reform and the introduction of the common backstop, we strengthen the safety net we created for our European citizens. This Eurogroup is committed to continuing to work on the completion of the banking union and the further development of the European Union monetarily.