EU ministers discuss fund for winding-up troubled banksTuesday 18 February 2014 21.51
Minister for Finance Michael Noonan has said he "wouldn't be surprised" if the EU agrees to speed-up the time frame for the establishment of a shared fund which would assist in the wind-up of troubled banks.
What is known as the Single Resolution Fund will only be mutualised within ten years, but Ireland believes it should be a fully shared fund in only five.
Under plans signed-off last December, the €55bn fund would be financed by levies on banks, however there would be "national compartments" for the first ten years
This means that if an Irish bank got into trouble in the first year, it would only be able to avail of limited SRF funding and, instead, have to fall back on bridge financing from the Irish Exchequer; and possible a loan from the permanent bailout fund called the European Stability Mechanism.
Mr Noonan has been arguing that there is a clear need to speedily break the link between the EU sovereign and EU banks.
He said: "If you have a fund that does not mutualise for a long time, you're delaying the separation."
The minister added that there was "a lot of support for the five-year idea" in Brussels during a meeting of all 28 finance ministers today.
He said the Greek presidency of the European Council has been given a new mandate to negotiate with the European Parliament on the matter.
MEPs have also been lobbying for a speedier mutualisation of the Single Resolution Fund.
Mr Noonan said there was a "general agreement" among EU finance ministers that parliament's suggestions would "improve the text" of the planned SRF.
There is a desire on all sides for agreement to be reached on this speedily before European Parliament elections in May and the publication of stress tests on European banks.
Minister Noonan expressed that a deal could be reached next month on the matter.