The direct recapitalisation of the Irish banks by the ESM is still a live issue and was the subject of discussion at yesterday’s meeting of European finance ministers Ecofin in Brussels which Minister Michael Noonan attended, Taoiseach Enda Kenny told the Dáil.
Mr Kenny said the question of recapitalising banks directly will only be addressed when European banking union, the Single Supervisory Mechanism, is established in the latter half of next year.
The Coalition has constantly argued that the country’s pillar banks, Bank of Ireland and AIB, should be allowed direct bank recapitalisation from the ESM fund after assurances were secured almost 18 months ago that Ireland would be treated as a special case.
Ireland pumped €64bn into the banks, and in June of this year EU finance ministers agreed to examine the issue on a case-by-case basis.
However, Ireland faces a ‘Catch 22’ situation as the successful clean exit from the troika bailout programme has lessened its case for further debt relief.
Mr Kenny told the Dáil at leaders’ questions it would be naive for anyone to think he could go to a European Council meeting and ask the 27 other leaders for a cheque for €50bn.
He was responding to United Left TD Joan Collins, who accused the Government of throwing in the towel by accepting retro-recapitalisation of the banks was not going to happen.
Ms Collins said 40% of the cost of bailing out the EU banking system was borne by Ireland, which only makes up 1% of the EU population.
“Is the Taoiseach accepting the situation where each and every person in this State is saddled with €9,000 of bank debt as against an average of €200 per person in the rest of the EU? Does he think this is fair? I certainly do not think it is”, she said.
She accused Mr Kenny of playing “footsie” with the EU and said he should be playing a lot more “hardball.”
The Dublin South Central TD said the Government’s priorities on the issue were shown up when it included just two sentences in Tuesday’s 66-page ‘A Strategy for Growth’ document dealing with the retro-recapitalisation.
She claimed it wasn’t high on the Government’s agenda and needed to be to the forefront of the strategy.
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