Ireland backs EU bailout fund role in banks
Paschal Donohoe has backed a call for the euro-area's main sovereign bailout fund to also be available to fund bank rescues, including in EU states that don't use the single currency.
The Finance Minister joined ministers from the Czech Republic, Denmark, Estonia, Finland, Latvia, Lithuania, the Netherlands, Sweden and Slovakia in calling for the change.
It is the latest move by Ireland to act within the emerging group of small Northern EU nations. The euro-area's biggest economies, Germany and France, as well as Italy, are notably absent from the group.
The push to use the European Stability Mechanism (ESM) as a financial last resort in the case of so-called bank resolutions - the term for managed shut-downs of bust lenders - would be a significant departure for the rescue fund. It was set up after the crash to raise money on the markets in deals underwritten by all euro member states, and to act as lender of last resort for countries including Ireland and Greece locked out of the markets.
The new scheme would expand its role to provide an EU-wide bailout fund for savers, if saving guarantee schemes needed extra funds. The banking sector would still have to repay any funds used. Funding savings guarantees has been under discussion at EU level for years as part of the Banking Union, but any move to share costs between has faced resistance from Germany in particular.
However, in a joint statement ministers, including Mr Donohoe, say the ESM can and should be adapted to the task.