Kenny seeks implementation of EU agreement on debt

Written By Unknown on Kamis, 18 Oktober 2012 | 22.40

While Mr Kenny did not name particular countries, his comments follow reservations expressed by the finance ministers of Germany, Finland and the Netherlands on a deal.

The Taoiseach repeated his call for the agreement of the 27 EU leaders on 29 June to be "carried through".

He was speaking in Bucharest at an economic seminar at a congress of political parties in the European People's Party movement.

He said: "This is a very difficult time. There is no time for delay for individual country issues."

However, EU officials have downplayed the prospect of any significant movement on Ireland's legacy bank debt issue at the leaders' summit, which gets under way in Brussels later this afternoon.

Instead, the Government is likely join other countries to push for the swift establishment of a pan-European banking supervision regime.

According to a European Commission proposal, the Single Supervisory Mechanism (SSM) could be in place as early as 1 January.

Germany insisted that the permanent EU bailout fund, the ESM, could only begin to recapitalise banks once the supervision mechanism was in place, but has since argued that that could take at least a year.

Mr Kenny also rejected a suggestion that introducing an ECB-led regulatory regime for banks would require a treaty change.

The Financial Times reported that the EU Council's top legal advisor said the plans for a eurozone banking supervisor were illegal as they go beyond current powers given to the ECB.

But Mr Kenny said: "My view is that it would not require treaty change, but I'm not a constitutional lawyer."

The plans to allow the ECB to regulate eurozone banks need to proceed prior to any bank deal.

Negative repercussions on market

Mr Kenny said that failure to follow through on commitments on bank debt could have negative repercussions on the markets

He said: "Where a decision is not followed through, that is made solemnly by the 27 leaders, market confidence in the stability of Europe is affected."

He said it was important that European citizens saw that agreements were implemented otherwise it would breed "cynicism, frustration and anger".

Mr Kenny did not speak to German Chancellor Angela Merkel at the meeting in Bucharest but plans to do so at the summit in Brussels.

Meanwhile, Ms Merkel has said Europe needs clear intervention rights when member states' national budgets violate EU rules.

She said a European currency commissioner was a possible way forward and that more European rights should be accompanied by a stronger European Parliament.

Fianna Fáil leader Micheál Martin has criticised the Taoiseach for failing to follow-up on the deal reached at June's summit by meeting the German, Dutch and Finnish prime ministers over the summer.

Mr Martin claimed there had been no contact, even by phone, with those key leaders.

He said it was important that there is some clarity about exactly what was agreed last June.

From his discussions with Dutch Prime Minister Mark Rutte in Brussels today, he said there seems to be different interpretations on the capacity of the ESM to deal with legacy issues in banks.


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