Bank debt deal 'must be honoured'

Taoiseach Enda Kenny has told the European Parliament in Strasbourg that last summer’s commitment by European leaders “to sever the toxic link between banking and sovereign debt” must be honoured.

In a well-received address outlining Irish priorities for its EU presidency, Mr Kenny said he was determined the Republic would exit the EU-IMF programme before the end of this year.

He delivered an upbeat assessment of the Irish economy while describing it as “still fragile”. “Last year our economy started to grow again our exports climbed to record-levels. We’re bringing government spending under control,” he told MEPs.

He said the result could be seen “in lower yields on Irish Government bonds” and said recent bond sales had showed that the market confidence that once ebbed is now returning.

He said Irish people continued to labour under the weight of bank-related debt and pointed out that austerity had “brought pain and suffering to many families, many homes. But the Irish people have borne that weight, that pain with remarkable courage and patience and quiet dignity."

Mr Kenny pointed out that Ireland had honoured all the EU-IMF commitments through eight Troika analyses. He said 2013 could be the year in which Ireland exited its programme and showed leadership to Europe, a statement which was greeted with applause by MEPs.

In an aspirational speech which was short on detailed proposals, he said the Irish presidency would work towards achieving a real banking Union and stressed the need to “work hard and together to renovate, to restore and to renew our union”.

He said 2012 had seen the passing “of possibly the worst of the economic crisis – the fear that the euro itself might not survive was confronted and dispelled emphatically and we now move onto the challenges of the recovery of Europe”.

While he was upbeat in his economic assessment he accepted it would not "console our citizens, our families who have lost jobs, who don’t need to read about the crisis – they live it every day”.

He said they would strengthen his resolve and said it was “for their sake that we push on and harder with actions to bring stability, new jobs, new growth to the union and re-install hope and confidence in our people’s lives".

He said Europe could not “allow a generation to grow up believing that their political leaders have failed to give them a reasonable chance in life. Because it is they who are democracy’s future, our future, Europe’s future,”

Mr Kenny cited the need to complete the single market and the removal of barriers to business, increasing trading opportunities and improving competitiveness as “critical in improving the environment for jobs”.