Written answers
Wednesday, 4 July 2012
Department of Finance
European Stability Programmes
9:00 pm
Micheál Martin (Cork South Central, Fianna Fail)
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Question 59: To ask the Minister for Finance if he has discussed the possibility of severing the link between sovereign debt and banking systems with Chancellor Merkel and any other EU leader; and if he will make a statement on the matter. [28966/12]
Micheál Martin (Cork South Central, Fianna Fail)
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Question 63: To ask the Minister for Finance the contact he has had with Chancellor Merkel regarding her response to requests for a banking union in Europe; and if he will make a statement on the matter. [30395/12]
Micheál Martin (Cork South Central, Fianna Fail)
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Question 64: To ask the Minister for Finance his views regarding Chancellor Merkel's position that there cannot be banking union unless there is political union across the EU; and if he will make a statement on the matter. [30396/12]
Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 59, 63 and 64 together.
I am in continuous contact with other European finance ministers and will attend Eurogroup and ECOFIN on the 9th and 10th of July to debate the proposals on Economic and Monetary Union agreed at last week's Council meeting. Officials in my Department have been in regular contact with their counterparts across the European Union for some time in the build up to last week's European Council and in the days since.
While I myself have not had discussions directly with Chancellor Merkel specific to the banking union proposals, I have had regular bilateral discussions on these and other related issues with my German counterpart at Eurogroup and ECOFIN, in addition to my visit to Berlin earlier this year. This matter would have also have been raised by the Taoiseach in his bilateral discussions with all European leaders around that important Council meeting.
The proposal for a banking union was first mooted by Commission President Barroso on 23 May. It has developed over the last number of weeks culminating in the paper on Economic and Monetary Union that was discussed at last week's European Council meeting.
One of the main proposals in the paper on Economic and Monetary Union relates to an integrated financial framework. It proposes that, building on the single rulebook, an integrated financial framework should have two central elements: [a] single European banking supervision and a common deposit insurance and resolution framework.
The European Commission will present proposals for a single supervisory mechanism shortly and these will be examined fully. A European deposit insurance scheme would introduce a European dimension to national deposit guarantee schemes for banks overseen by the European supervision. This could strengthen the credibility of the existing arrangements and serve as an important assurance that eligible deposits of all credit institutions are sufficiently insured. A European resolution scheme – with appropriate resolution tools, could provide assistance in the application of resolution measures to banks overseen by the European supervision with the aim of orderly winding-down non-viable institutions and thereby protect tax payer funds. However much depends on the actual detail of the proposals. Once proposals are brought forward they will be examined carefully and we will engage constructively in their consideration at European Council.
I welcome the Euro area Summit Statement of 29 June which affirms the importance to break the vicious circle between banks and sovereigns and commits to further examine the situation of the Irish financial sector with a view to improving sustainability. This represents a significant shift in European policy and one which will be further developed following the examination by the Eurogroup to further improve the sustainability of our adjustment programme.
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