Merkel could scupper Irish bank plan

The Government’s aspirations to capitalise the Irish banks through the European Stability Mechanism (ESM) could be derailed by German chancellor Angela Merkel.

Last weekend Ms Merkel and French president François Hollande called for the resolution of failing banks to remain the responsibility of individual member states.

The Franco-German position is at odds with the agreement reached at the EU Summit in Jun 2012, which pledged to break the link between the banking sector and sovereigns.