Colm Kelpie: Irish presidency can argue it has done the groundwork
LAST week, it looked as if Ireland's EU presidency was toppling as it careered toward the final hurdle.
Tanaiste Eamon Gilmore was accused of pre-emptively announcing a deal on the EU's multi-year budget before the European Parliament had voted on it, with one MEP accusing him of manipulation.
Fast forward a week and the presidency has clinched a deal with senior figures in the parliament on the so-called multi-annual financial framework (MFF), despite some concerns, while Finance Minister Michael Noonan has reached political agreement on rules to deal with failing banks.
And all just three days before the presidency draws to a close.
European finance ministers hope that the deal, which has yet to be agreed by the parliament, will switch the burden of having to pay for collapsing banks from the shoulders of the taxpayer to private investors and creditors.
"This is a revolutionary change in the way banks are treated in the European Union," Mr Noonan said at the closing press conference.
The new rules will now force banks to draw up detailed plans setting out what measures they'll take to nurse themselves back to health in the event of a crisis.
They'll have to also pay into a national pot, known as a resolution fund, which will be used for recapitalisation once investors and creditors have been tapped for money.
From the presidency's point of view, a clear pecking order has been established as to who will take losses when a bank gets into trouble.
Shareholders, junior and senior bondholders and wealthy depositors will all be tapped.
But those with less than €100,000 will be protected, their money regarded as "sacrosanct".
Small businesses, while liable for losses, will be protected over bigger corporate companies.
Greater flexibility was urged from some countries, and under the rules liabilities to employees of failing institutions, such as pensions, will be excluded as well as bonds held by other financial institutions.
The rules have yet to be agreed by the European Parliament, with MEPs likely to demand changes. It's certainly not a done deal yet.
But that will be a problem for the Lithuanian presidency.
The Irish presidency can argue it has laid down the groundwork.