The European Commission has said the political agreement reached by euro zone leaders in June was “quite clear” on the European Stability Mechanism and bank debt, despite comments by three European finance ministers.
Yesterday the German, Finnish and Dutch finance ministers released a statement in which they said the ESM would only deal with future banking problems, and not those which occurred in the past.
However EC spokesman Olivier Bailly said the comments were part of an “ongoing debate” and there was already a deal on breaking the "vicious circle" between sovereign and banking debt.
Mr Bailly said the Eurogroup - the euro zone’s finance ministers - has been delegated to finalise technical work to ensure their leader's decision was properly implemented.
He said the European Commission wants the decisions from the June summit to be quickly implemented, including both introducing banking supervision and the ESM being able to recapitalise banks.
Last night’s statement by Germany's Wolfgang Schauble and his Dutch and Finnish colleagues Jan Kees de Jager and Jutta Urpilainen has cast doubt on Ireland’s ability to get a deal on its banking debt, which the Government has been intensely lobbying for in recent months.
However Minister for Finance Michael Noonan has told the Dáil that he had gotten confirmation this morning from the European Commission that what was agreed in June still stands.
He said it was in the nature of EU agreements that different interpretations can be made in the early stages.
Fianna Fáil's finance spokesperson Michael McGrath described the statement as a setback and said it is obvious that Europe thinks Ireland is doing well.
He said the Summit statement from the summer is no good unless it is implemented and said noises from Germany have not been good of late.