Bernard Durkan (Kildare North, Fine Gael)
Link to this: Individually | In context | Oireachtas source

303. To ask the Minister for Finance the extent to which there is recognition at ECB level of the need for an all-Europe response to debt repayment throughout member States with particular reference to the need for recognition of the ability of each member State to meet its repayments without causing further damage to the respective economy of each country and the need to achieve separation of sovereign and banking debt; and if he will make a statement on the matter. [24398/13]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

As the Deputy will be aware, the ECB is an independent institution and I have no role in its deliberations. As regards the capacity of individual Member States to repay their sovereign debt, there have been a number of positive developments at EU level in recent years. For instance, retro-fitting the euro area with the necessary tools to make it commensurate with a monetary union has been a vital step forward. These governance reforms – including the reforms to the Stability and Growth Pact – will have a key role to play in containing fiscal imbalances in the future, and help to put the debt-to-GDP ratio on a downward trajectory, thereby improving the repayment capacity.

In addition, the establishment of an effective backstop – initially in the form of the EFSF / EFSM and more recently in the ESM – provides, in appropriate circumstances, support to Member States in making the necessary economic and fiscal adjustments.

Another development relates to the creation of a banking union, which is a priority and which is also an important part of the necessary reforms at EU level.

In relation to whether or not initiatives such as Eurobonds are part of the solution, this is part of a wider debate at EU level on the future of EMU which is on-going.

Finally, I would recall that the Heads of State or Government stated in June last year that it is imperative to break the link between banking debt and sovereign debt, and work is on-going at EU level to achieve this.