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IRELAND may be permitted to offload the massive bank debt covered by taxpayers on a "case-by-case basis".

The European Stability Mechanism (ESM) will provide for up to €60bn to be allocated to bank recapitalisation – and this may be applied on deals already concluded.

Ireland stumped up €30bn to prop up banks like AIB, Bank of Ireland and Permanent TSB at the height of the economic crisis.

This left the country with a huge national debt and in an uncertain position on the financial markets.

However, finance ministers have hammered out a deal about the makeup of the ESM after six months of discussion.

They ruled that the ESM may take a stake in banks that have already been recapitalised. This has opened the possibility that Ireland will be able to get some of the money back.

"The potential retroactive application of the instrument should be decided on a case-by-case basis and by mutual agreement," the ESM said.

Minister for Finance Michael Noonan said that it was a breakthrough for Ireland.

"There the potential for retrospective application of capitalisation," he said. "So there is a long way to go of course and a lot of work to be done. But if we had failed to get it in, it would have been the end of the road."

German Finance Minister Wolfgang Schaeuble said that the agreement had "accomplished an important step on the way to the banking union" yesterday.


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