Taoiseach Enda Kenny has said that the citizens of Europe expected political leaders to follow through on decisions they had reached during EU summits.

Speaking alongside the European Commission President in Brussels, Mr Kenny said the decision taken at the June summit on using the ESM to directly recapitalise banks had to be finalised and implemented.

Mr Kenny, who is leading a delegation of ten Cabinet ministers for a meeting with the European Commission, met José Manuel Barroso earlier on preparations for the Irish presidency from 1 January.

The Taoiseach said that EU leaders in June had agreed to break the link between bank debt and sovereign debt and that that decision had to be followed through.

"It's a question about the confidence the people of Europe have in the institutions. Decisions made by the European Council have been undermined in the past, even the following day.

"It's about credibility, it is about confidence... This is about demonstrating to the citizens of Europe that when the council makes decisions in their interest that they be followed through.

"Pragmatism, decisive leadership and courage (are required) to implement and finalise the decisions made in regard to breaking the link between sovereign and bank debt," Enda Kenny said.

A senior Government source has said that European Council President Herman Van Rompuy had agreed with the Taoiseach during a 55-minute meeting in Brussels that the bank debt agreement "had to be implemented".

The source downplayed earlier remarks by an EU official that Mr Van Rompuy would be raising the issue with other eurozone leaders at a summit of EU leaders on 18-19 October.

However, Mr Barroso said he did not want to be drawn into semantics when asked if he agreed with Mr Kenny's earlier assertion that what was agreed in June was a "fact" - that legacy debt could be dealt with by the ESM - and that it was not a matter of interpretation.

Mr Barroso said: "We in the Commission are exploring options with the ECB and the IMF to further improve the sustainability of the well-performing Irish programme.

"The heads of state and government agreed that the future ESM should have the possibility to recapitalise the banks directly, once the new supervisory mechanism is in place.

"This will allow the ESM to break the vicious circle between banks and sovereigns. This was agreed clearly in that meeting. I was part of that meeting. I remember well not only the conclusions but also the spirit, the context, the agreement that we have reached," he said.

He said that technical work on the future recapitalisation instrument had begun and that there was "some important technical work to conclude".

"I think it is essential to find the best possible solution for Ireland and for the euro area and we are working with our partners to that end."

A recent statement by the finance ministers from Germany, the Netherlands and Finland amounted to backsliding on the commitment by EU leaders in June.

The ministers stated that the eurozone permanent bailout fund would deal with matters arising in the future, rather than whay they termed "legacy issues".

Earlier, Tánaiste Eamon Gilmore stressed that people should not equate what the three finances ministers said with a decision by all 27 leaders.

Mr Gilmore said that the decision was made "in Europe's interest".

The Taoiseach is today holding meetings with the presidents of the Commission and the European Council.

While the euro crisis is likely to dominate Ireland's EU presidency, there will be other divisive issues, such as CAP reform and the next EU budget round, which runs from 2014 to 2020.

The Government will have to bring forward a new banking supervision regime that will need to command the support of all 27 governments, including those who are not members of the single currency.

Until such a scheme is up and running, the ESM cannot be used to directly recapitalise banks.

The debate over the future and long-term direction of the EU, perhaps towards a federation of nation states, will gather momentum during the Irish presidency.