Merkel hopeful on banking union

Chancellor does not rule out direct EU aid to ease burden of €60bn banking bailout

German chancellor Angela Merkel has said she remains hopeful of a positive outcome in talks on Europe’s banking union, the initiative at the centre of Ireland’s hopes for direct EU aid to alleviate the burden of the €60 billion banking bailout.

German chancellor Angela Merkel has said she remains hopeful of a positive outcome in talks on Europe’s banking union, the initiative at the centre of Ireland’s hopes for direct EU aid to alleviate the burden of the €60 billion banking bailout.

Sat, Mar 8, 2014, 01:01


German chancellor Angela Merkel has said she remains hopeful of a positive outcome in talks on Europe’s banking union, the initiative at the centre of Ireland’s hopes for direct EU aid to alleviate the burden of the €60 billion banking bailout.

In Government Buildings yesterday after bilateral talks with Taoiseach Enda Kenny, Dr Merkel did not rule anything out when asked if Ireland had a legitimate claim to European compensation for legacy or historic banking debts.

She said that much had been achieved “but we’re not at the end of the road yet.”

Dr Merkel’s first visit to Government Buildings came after she and Mr Kenny attended the conference in the National Convention Centre of the European Peoples’ Party, Fine Gael’s affiliate group in Europe.

While Dr Merkel’s government and its Dutch and Finnish allies have opposed the provision of retrospective bank aid to Ireland, the chancellor opened her remarks by saying she wished to pay her respect and admiration for Ireland’s achievement in leaving the EU-IMF troika programme.

“This is thanks to the people of Ireland who were ready and willing to embark on this very difficult course,” she said.


Success story
“I think that once these first lines of success, the fact that Ireland

[has been] able to leave the troika programme, obviously is a great success story, and obviously if one looks at the spreads for State bonds for example, that is truly a success.”

When Ireland’s demand for retrospective bank aid was raised, she said the important thing for her was that Ireland’s bailout “first and foremost” can be seen as completed.

“We’ve all I think learned our lessons of the past and part and parcel of that is that we need to work together very closely on financial issues, for example, as regards banking union. There are still talks outstanding on the innovative details of that,” she said.

“We shall have a single supervisory mechanism. We shall also conclude discussions [for] a single recovery mechanism and the necessary rules for recapitalisation.

“All of that is currently in the consultation process and I must say that I can only say that I have a positive outlook on the possible outcome.”

Dr Merkel also said the success in leaving the bailout should be reflected in dividends to be reaped by people in business as regards access to loans. “That has to be made easier and Germany wishes to be of help here.”

Mr Kenny said nothing could be done about Ireland’s retrospective compensation claim for rescuing the banks until a pan-European bank supervisor is set up at the end of this year.

“Nothing can be done about it until the single supervisory mechanism is put in place and at that time from case to case as was agreed in 2012,” he said.

“Nothing can be done about it until the end of the year. The chancellor is hopeful that there will be a good result.”


Apple tax strategy
The Taoiseach and

Dr Merkel were also asked about Apple’s tax strategies in Ireland, report in yesterday’s Irish Times .

Mr Kenny said there had been discussions about the matter before, adding that there would be further talks. Ireland would participate fully in the international response to the corporate tax question, he added.

“Obviously the Minister for Finance dealt with in the last budget on the concept of statelessness and we pointed out very clearly that we can only tax on where we can tax here and the stateless issue is now being dealt with,” he said.

“But this is not an issue that is confined to one country. It is a fact of life that the digital world has moved very far in advance of the legislative world and this requires an international response to what is an international issue. And we will be . . . co-operative with all the players in this, that you get a system that is clear . . . and that stands up.”

Dr Merkel said she could only emphasise what Mr Kenny had said. “We asked the OECD to develop clear rules for this and the G20 dealt with this. A lot of thing needs to change in the next two years and they will change and we will have a level playing field . . . I think we’re on the same page and I think we’re on a good track.”