Friday 23 February 2018

Noonan: “The single resolution fund is not a levy on tax payers but on the banking industry”

Finance Minister Micahel Noonan
Finance Minister Micahel Noonan
Louise Kelly

Louise Kelly

Minister for Finance Michael Noonan told an Oireachtas Committee today that the European Stability Mechanism (ESM) should be the clear public backstop for Single Resolution Mechanism (SRM).

“The single resolution fund is not a levy on tax payers but on the banking industry,” he said.

Speaking at a Joint Committee on Finance, Public Expenditure and Reform, Minister Noonan was discussing the agenda for the forthcoming ECOFIN Council meeting.

“The SRM has been put on the ECOFIN agenda rather late but it is one of the crucial issues to be discussed. It is an important step in breaking the link between the sovereign and the banking sector,” he said.

Minister Noonan warned the Committee that the ECOFIN meeting may be "a long one" and that the agenda "may be subject to change".

He also confirmed to Chairman Ciaran Lynch TD (Lab) that the SRM will not apply to Irish credit unions.

However, the finance minister fielded many issues and queries that he stressed were not on the agenda of the ECOFIN meeting.

He told Michael McGrath TD (FF) that “the formal exit from the Troika programme will not come up in any format”. 

However, he elaborated for Pearse Doherty TD (SF) when pushed. “We see exiting the bailout as a normalisation process – as returning as a fully fledged member of the Eurozone,” he told the Sinn Fein representative. 

But the minister was nonetheless reluctant to “give rise to speculation until the stress tests of banks take place” which will be “done as part the entire European stress test arrangement”

Perhaps the most adversarial discussion of this morning’s meeting was between Minister Noonan and Richard Boyd Barrett TD, whom the finance minister told was only “allowed to ramble on because Mr Lynch is such a benign Chairman”.

“You are grandstanding on a long playing record as you have done for three years. You have been proven wrong on every prediction you have made,” said Mr Noonan, as Mr Boyd Barrett asked repeatedly for a definitive answer on the status of retrospective recapitalisation of Irish banks.

On a query from Arthur Spring TD (Lab) as regards standardised VAT, Mr Noonan said: “Europe will not dictate to us what VAT rates will apply in Ireland.”

However, the finance minister did agree that there may be overly positive international market sentiment towards Ireland – a disconnect between individual and country

“The sentiment coming from abroad is an overview. They are relying a lot on the macro statistics and not individual cases,” he told the Committee.

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