Advertisement

We need your help now

Support from readers like you keeps The Journal open.

You are visiting us because we have something you value. Independent, unbiased news that tells the truth. Advertising revenue goes some way to support our mission, but this year it has not been enough.

If you've seen value in our reporting, please contribute what you can, so we can continue to produce accurate and meaningful journalism. For everyone who needs it.

German Finance Minister Wolfgang Schaeuble, center, the Finance Minister of the Netherlands, Jan Kees de Jager, right, and the Finance Minister of Finland, Jutta Urpilainen. Michael Sohn/AP/Press Association Images

Germany, Finland and the Netherlands deliver blow to Ireland's hopes for bank debt deal

The country’s three finance ministers issued a statement last night stating that the EU rescue fund would only deal with future problems.

THE MINISTERS OF Finance of Germany, Finland and the Netherlands have delivered a massive blow to the Irish Government’s hopes of securing a deal to reduce the impact of its bank debt.

In a statement issued last night, German Finance Minister Wolfgang Schaeuble, the Finance Minister of the Netherlands, Jan Kees de Jager and the Finance Minister of Finland, Jutta Urpilainen suggested that the EU’s rescue fund, once established, will only deal with future problems.

“The ESM can take direct responsibility of problems that occur under the new supervision, but legacy assets should be under the responsibility of national authorities,” they said following a meeting in Helsinki.

The message appears as a contradiction to what Ireland’s Finance Minister Michael Noonan understood from last June’s summit after which the Government’s hopes that the European Stability Mechanism would ease the burden of the country’s bank debt.

After that gathering, it was implied that there would be a separation of sovereign and bank debt with the main summit statement beginning:

We affirm that it is imperative to break the vicious circle between banks and sovereigns.

Earlier this month, Noonan had said he had received “very strong support at political level” at an informal meeting of eurozone finance ministers in Cyprus to make the country’s debt more sustainable.

Schaeuble, Kees de Jager and Urpilainen also said that the block should work off the principle that  the ESM should be used as a last resort – only when other options, including private capital and national public capital have been exhausted.

“…direct bank recapitalisation by the ESM should take place based on an approach that adheres to the basic order of first using private capital, then national public capital and only as a last resort the ESM.”

The details of the statement from the three ministers has been somewhat downplayed by the Department of Finance. In a statement issued this morning, it said that technical discussions in line with the June summit mandate remain ongoing about how the sustainability of the Irish financial system can be improved.

“The Heads of State and Government agreed on the 29 June to break link between banks and sovereign,” it added. “This was a very important and decisive decision taken by the An Taoiseach and 16 other Heads of State and Government and work will continue to deliver on this decision.”

We agree on the need to achieve rapid progress on the EU agenda, including on the single supervisory mechanism. We welcome their ideas on how to give effect to the decision of eurozone leaders that the ESM should have the capacity to recapitalise banks directly, following the establishment of an effective single supervisory mechanism.  These ideas will feed into our discussions in the Eurogroup and at Heads of State level over the coming months.

It also welcomed the recognition from the three ministers about the recent positive review of the Irish programme.

The full statement from the three ministers:

We met today at Königstedt Manor outside Helsinki to discuss the topical issues of the Eurogroup and the ECOFIN Council. Our talks were conducted in a very positive and cordial atmosphere.

We welcome the recent positive reviews of the Irish and Portuguese EU/IMF programs. We look forward to the Troika report on the next review of the Greek EU/IMF program and the completion of the agreed fiscal and structural policy measures that constitute an important precondition for a successful review. We agreed that the implementation of the European Semester, including budgetary discipline and targets, in all countries remains key to ensuring financial stability; the ESM and the other crisis mechanisms can only play a supplementary role to these policies that are decided at the national level. National reform agendas of some Member States are in this context especially important. In this respect we encourage Spain to continue its national reform agenda in due time.

We agreed on the profound importance of the work that is currently being undertaken by the President of the European Council, in close collaboration with the President of the Commission, the President of the Eurogroup and the President of the ECB, to develop a precise and time-bound road map for the achievement of a genuine Economic and Monetary Union. The report will cover three frameworks (financial, budgetary and economic policy) and the strengthening of democratic legitimacy and accountability. To fulfil its role in preparing the Euro Summit meetings, the Eurogroup has to work proactively on these issues.

Regarding financial markets topics, we touched upon the issue of a Single Supervisory Mechanism. We took note of the constructive political discussion that took place at the Informal Ecofin in Nicosia on Sept. 15. We agreed that it is important to achieve rapid progress on this issue, but it cannot happen at a cost of the quality of the new supervision.

Specifically, we discussed the governance, independence, decision making and accountability of the new Single Supervisory Mechanism involving the ECB. The new framework has to ensure that the ECB can continue to conduct effectively and independently its current tasks, and it has to take into account the concerns of non euro area Member States regarding governance of the new supervision. This requires appropriate governance structures and a clear division of responsibilities between a new ECB Supervisory Council, which may include representatives from all Members States, and the Governing Council of the ECB. To ensure the accountability of the new Supervisory Council, it should report on the stability situation and its decisions to European Finance Ministers (Ecofin Council or Eurogroup ) as well as provide reports to the European Parliament and national Parliaments.

Regarding longer term issues, we discussed basic principles for enabling direct ESM bank recapitalisation, which can only take place once the single supervisory mechanism is established and its effectiveness has been determined. Principles that should be incorporated in design of the instrument for direct recapitalization include: 1) direct recapitalisation decisions need to be taken by a regular decision of the ESM to be accompanied with a MoU; 2) the ESM can take direct responsibility of problems that occur under the new supervision, but legacy assets should be under the responsibility of national authorities; 3) the recapitalisation should always occur using estimated real economic values; 4) direct bank recapitalisation by the ESM should take place based on an approach that adheres to the basic order of first using private capital, then national public capital and only as a last resort the ESM.

With a view of the work on the financial framework, we look also forward to the upcoming report by the Commission’s high-level expert group, chaired by Governor Erkki Liikanen, on possible reforms to the structure of the EU banking sector.

We discussed issues pertaining to the start-up phase of the European Stability Mechanism, including the upcoming inaugural meeting of the ESM Board of Governors on 8 October.

Earlier: Noonan confident about bank debt deal>

Readers like you are keeping these stories free for everyone...
A mix of advertising and supporting contributions helps keep paywalls away from valuable information like this article. Over 5,000 readers like you have already stepped up and support us with a monthly payment or a once-off donation.

Close
116 Comments
    Install the app to use these features.
    Mute Declan Gibney
    Favourite Declan Gibney
    Report
    Sep 26th 2023, 10:42 AM

    Loved him as the Invisible Man. RIP.

    235
    Install the app to use these features.
    Mute
    Favourite
    Report
    Sep 26th 2023, 11:32 AM

    @Declan Gibney: I never saw him in the Invisible Man. Great actor though. Will be missed.

    95
    Install the app to use these features.
    Mute declan holden
    Favourite declan holden
    Report
    Sep 26th 2023, 1:32 PM

    @Declan Gibney: very fond memories of that series and the Gemini man as a kid.

    17
    See 3 more replies ▾
    Install the app to use these features.
    Mute A Kelly
    Favourite A Kelly
    Report
    Sep 26th 2023, 2:02 PM

    @: that’s because he was invisible! :)

    12
    Install the app to use these features.
    Mute TheGood Feign
    Favourite TheGood Feign
    Report
    Sep 26th 2023, 4:10 PM

    @Declan Gibney: Oh yeah, I remember that from when I was really young. That was great, and spooky.

    6
    Install the app to use these features.
    Mute Liam Byrne
    Favourite Liam Byrne
    Report
    Sep 26th 2023, 8:27 PM

    @Declan Gibney:
    I never saw him on that.

    1
    Install the app to use these features.
    Mute mary cooke
    Favourite mary cooke
    Report
    Sep 26th 2023, 10:56 AM

    RIP David, watched him for years on NCIS, going strong in current S20.
    Remember The Man from UNCLE fondly.
    A great age.
    May he rest in eternal peace.

    141
    Install the app to use these features.
    Mute Bruno
    Favourite Bruno
    Report
    Sep 26th 2023, 10:56 AM

    RIP David

    I loved him in Sapphire & Steel

    130
    Install the app to use these features.
    Mute Steve O'Hara Smith.
    Favourite Steve O'Hara Smith.
    Report
    Sep 26th 2023, 11:59 AM

    @Bruno: That was fun even if the intro annoyed me… They’re not elements…

    16
    Install the app to use these features.
    Mute TheGood Feign
    Favourite TheGood Feign
    Report
    Sep 26th 2023, 4:13 PM

    @Bruno: I was flabbergasted they hadn’t mentioned Sapphire & Steel. Anyways, mee too, loved him in that one.

    11
    Install the app to use these features.
    Mute Paul Moloney
    Favourite Paul Moloney
    Report
    Sep 26th 2023, 11:06 AM

    R.I.P AND WHAT AN ACTOR FOR HIS DAY

    84
    Install the app to use these features.
    Mute Kerry Mink
    Favourite Kerry Mink
    Report
    Sep 26th 2023, 11:35 AM

    Man from U.N.C.L.E – I was a club member as a kid. RIP David.

    72
    Install the app to use these features.
    Mute John Ledwidge
    Favourite John Ledwidge
    Report
    Sep 26th 2023, 1:03 PM

    @Jimmy Wallace: Badge & ID

    26
    Install the app to use these features.
    Mute Shea Fitzgerald
    Favourite Shea Fitzgerald
    Report
    Sep 26th 2023, 3:49 PM

    @Jimmy Wallace: All of the above! They put coded messages in one of the evening papers and you had to use the code breaker to decode them. He was great as Dr. “Ducky” Mallard in NCIS. RIP.

    10
    Install the app to use these features.
    Mute Mick Hanna
    Favourite Mick Hanna
    Report
    Sep 26th 2023, 11:40 AM

    He was great in Sapphire and Steel. R.I.P David.

    46
    Install the app to use these features.
    Mute Anne Collins
    Favourite Anne Collins
    Report
    Sep 26th 2023, 1:11 PM

    Aww loved him in The Man from U.N.C.L.E.

    25
    Install the app to use these features.
    Mute Patrick C
    Favourite Patrick C
    Report
    Sep 26th 2023, 1:17 PM

    @Anne Collins: His favourite dessert was Strawberries and Cream !!! RIP

    10
    Install the app to use these features.
    Mute Sara McSweeney
    Favourite Sara McSweeney
    Report
    Sep 26th 2023, 12:59 PM

    David’s song from Kidnapped was v popular in the 70s and he was brilliant as Alan Breck Stewart. He was in so many good shows and made a great hero.

    19
    Install the app to use these features.
    Mute Nineteen Sixteen
    Favourite Nineteen Sixteen
    Report
    Sep 26th 2023, 3:28 PM

    RIP David.
    Brings back wonderful memories of the theme to the weekly series “Kidnapped” and the song David’s Theme. The uillean pipes in the series was played by another legend Liam O’Flynn. Well worth a listen to.

    12
    Install the app to use these features.
    Mute Daragh McCauley
    Favourite Daragh McCauley
    Report
    Sep 26th 2023, 8:48 PM

    RIP Ducky

    5
    Install the app to use these features.
    Mute Karl Murray
    Favourite Karl Murray
    Report
    Sep 27th 2023, 2:12 AM

    Illya Kuryakin, a name that has stuck in my head.

    3
Submit a report
Please help us understand how this comment violates our community guidelines.
Thank you for the feedback
Your feedback has been sent to our team for review.
JournalTv
News in 60 seconds