Micheál Martin (Cork South Central, Fianna Fail)
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To ask the Minister for Finance following the EU Council meeting, if the prospect of an EU banking union is achievable within the next 12 months; and if he will make a statement on the matter. [33230/12]

Micheál Martin (Cork South Central, Fianna Fail)
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To ask the Minister for Finance his views regarding EU proposals on banking regulation and its impact on the International Financial Services Centre here; and if he will make a statement on the matter. [40094/12]

Micheál Martin (Cork South Central, Fianna Fail)
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To ask the Minister for Finance if he has commissioned any analysis regarding the proposed European Banking Union agreed in principle by him in June. [40251/12]

Michael Noonan (Limerick City, Fine Gael)
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I propose to take Questions Nos. 70, 87 and 88 together.

The European Council meeting of 29 June considered a report from the President of the European Council in cooperation with the Presidents of the Commission, Eurogroup and ECB which set out building blocks for future Economic and Monetary Union. One of these building blocks is an integrated financial framework or banking union which comprises three elements: (a) an integrated system for the supervision of cross-border banks; (b) a European deposit insurance scheme; and (c) a European resolution scheme.

The Euro Area Summit also on 29 June called on the Commission to quickly present proposals for the setting up of a single supervisory mechanism which would be considered by the Council as a matter of urgency. Significantly, the statement of the Euro area Summit clearly stated that when such a mechanism is in place for banks in the euro area the ESM could, following a regular decision, have the possibility to recapitalise banks directly. The statement also committed the Eurogroup to examining the situation of the Irish financial sector with a view to further improving the sustainability of our well-performing adjustment programme. The Commission presented legislative proposals in September for a single supervisory mechanism conferring powers on the ECB for the supervision of all banks in the euro area, with a mechanism for non-euro countries to join on a voluntary basis. The Commission called on the Council and European Parliament to adopt the legislative proposal by the end of 2012. While the timetable is ambitious we will be supporting efforts by the European Council to meet this target.

Ireland supports in principle the development of a banking union for Europe. Our support for a single supervisor is contingent on such a system definitively breaking the link between the sovereign and the banking sector. We are also seeking to ensure that shared supervision is progressed as part of a package which will also address shared risk and mutualisation of debt. The question of retrospective application of ESM remains firmly on the table as far as Ireland is concerned and we would expect to see more detail on how this can be addressed over the coming months. Any move to a banking union must respect the integrity of the single market and be consistent with the principle of free movement of capital throughout the European Union.

I do not propose at this stage to commission an analysis of the proposal. My officials are working closely with the Central Bank in relation to our position on the details of the shared supervisory mechanism proposal and will also be consulting with industry stakeholders. The interests of the IFSC will of course be taken into account by my officials in these deliberations.