Summit delivered 'good solid progress'

TAOISEACH ENDA Kenny declared the outcome of the EU summit to be good for Ireland, but his remarks came before Angela Merkel cast doubt over the scope of any ESM bank rescues.

Mr Kenny said the restatement by EU leaders of the need to break the link between bank and sovereign debt was significant.

Although the leaders told euro zone finance ministers to set criteria for direct ESM aid to banks, the Taoiseach said it was for the ministers to decide when.

“You take it that in an objective sense this will be followed through very diligently by the euro group and by Minister Noonan who represents us on that,” he told reporters.

He also linked Dublin’s campaign for bank debt relief to the question of the sustainability of Ireland’s national debt.

“The Government are also continuing to work with our colleagues to improve the understanding of the sustainability of our debt that we agreed in June,” he said.

“As I said before, these things are very complex and sensitive, and I’m not going to go into the detail of them here.”

At the same time he said the fixing of a deadline for the European Central Bank to supervise euro zone banks was a step forward. The introduction of these new ECB powers is a precondition for direct ESM aid to banks.

The leaders want an agreement on legislation for this plan by the end of the year.

However, the Taoiseach said this would not clear the way for immediate bank rescues by the ESM.

“Does this mean that recapitalisation can take place on January 2nd? No it doesn’t. It means that the legal framework is to be in place on January 1st and that’s the framework within which ... the organisation and the arrangements have to be put in place during the course of 2013.”

It was the view of Dr Merkel that this work would be completed by 2013, Mr Kenny said.

However, he did not answer a question as to whether he had any concerns that the German election next September could hinder talks on the bank rescues by the ESM.

Mr Kenny said the summit delivered “good solid progress” on key questions.

“The important thing to remember is that there was a clear reaffirmation of the commitments that we made in June at breaking the link between sovereign debt and bank debt and to prepare for the recapitalisation of banks.”

He added: “I have said on many occasions that the credibility of the EU and the euro zone rests on the willingness and, indeed, the courage of its leaders to follow through on the decisions that are made and to be seen to follow through.

“That’s what leadership is about: the difference between the concept of an idea and the translation of it into reality,” said the Taoiseach.

“So the process now towards moving towards a banking union and our destination in that regard is now very clear.”