I propose to take Questions Nos. 85, 99, 103, 107 and 108 together.
As I have said previously, the statement by the three Finance Ministers of Germany, Netherlands and Finland on 25 September addressed issues already decided upon by Eurozone leaders when they met in Brussels on 29 June. At that time, the Heads of State or Government stated “that it is imperative to break the vicious circle between banks and sovereigns” and that “the Eurogroup will examine the situation of the Irish financial sector with the view of further improving the sustainability of the well-performing adjustment programme.”
The European Council on 18-19 October subsequently reaffirmed that “the Eurogroup will draw up the exact operational criteria that will guide direct bank recapitalisations by the European Stability Mechanism (ESM), in full respect of the 29 June 2012 euro area Summit statement. It is imperative to break the vicious circle between banks and sovereigns.”
Ireland is a special case due to the unique circumstances behind our banking and sovereign debt crisis and the fact that our banking crisis emerged at a time when the full range of European mechanisms were not available to us.
The Taoiseach and Chancellor Merkel spoke together following the October European Council. They reaffirmed the commitment from June 29th to task the Eurogroup to examine the situation of the Irish financial sector with a view to further improving the sustainability of the well performing adjustment programme. They recognised, in this context, that Ireland is a special case, and that the Eurogroup will take that into account.
The key timeline in regard to the realisation of these commitments is the establishment of the Single Supervisory Mechanism and not elections in any Member State. It is only once this has been put in place that the ESM will be in a position to recapitalize banks directly. It is expected that this will not be completed before the second half of next year.