Noonan: No bailout deal before end of summer

Securing a deal would be a “medium-term exercise” and the Government would “be pushing very hard in the autumn,” he said.

Despite no immediate prospect of a deal and the eurozone debt crisis worsening in recent weeks, Mr Noonan said Europe had had “a pretty good month”.

His comments were met with raised eyebrows from TDs, who pointed out that Spain had sought a bailout and Italy could be next.

Mr Noonan admitted that his comments could be viewed as “provocative”, but cited four reasons for saying it had been a good month:

* Ireland’s approval of the fiscal treaty;

* Spain finally accepting it needed a bailout after spending a long time “in denial”;

* The election of parties in Greece that would stick to, rather than rip up, the country’s bailout;

* French president François Hollande winning a majority in the parliamentary elections, strengthening his hand as he pushes a pro-growth agenda.

Mr Noonan said the crisis could have been “a lot worse” if any of those four outcomes had gone the opposite way.

He said the problems of member states could no longer be viewed in isolation and what was needed now was a comprehensive eurozone solution.

Mr Noonan acknowledged proposals for a European “banking union” had developed “at pace” in recent weeks.

The proposals call for common banking supervision, an integrated guarantee scheme for depositors, as well as a dedicated resolution fund to bail out failing banks.

Mr Noonan stressed that Ireland would agree to a banking union only if the resolution fund was applied retrospectively to deal with Ireland’s bank debt.

There was “not much” point contributing to such a fund if Ireland could not benefit from it.

Mr Noonan stressed that, contrary to “folklore”, he has repeatedly asked the ECB for a writedown of Ireland’s bank debt, but that the institution had refused. The ECB’s position had only hardened since he first asked in Mar 2011, he said.

People before Profit TD Richard Boyd Barrett questioned how anybody could say Europe had had a good month and suggested Mr Noonan was living on a different planet.

Separately, Taoiseach Enda Kenny acknowledged further referenda were likely if the EU moved towards potential solutions such as closer fiscal integration.

“If you proceed down the end road of fiscal union, clearly there are implications for new treaties,” he said.