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Matt Carthy MEP seeks clarity from Regling on Irish Bank recapitalisation

23 July, 2014 - by Matt Carthy MEP


Sinn Féin Midlands North West MEP, Matt Carthy, has written to Klaus Regling, Managing Director of the European Stability Mechanism (ESM) seeking clarity regarding the potential for retrospective recapitalisation of the Irish Banks.  

Carthy, who is a member of the European Parliament’s Economic and Monetary Affairs Committee, said:

“As a representative of the Irish people and as a member of the European Parliament’s Economic and Monetary Affairs Committee I have written to Klaus Regling seeking clarity regarding the operation of the European Stability Mechanism (ESM) of which he is Managing Director.

“Assertions were made by the Irish government following the June 2012 Euro Area Summit Statement regarding the separation of banking and sovereign debt raising the expectation that the banking debt relating to the Irish “pillar” banks could be alleviated through the use of the ESM.

“Sinn Féin welcomed this commitment but pointed out that we felt words alone were meaningless.  Now two years later comments made by Klaus Regling and others have seemingly pointed to this possibility being remote.

“I have asked Klaus Regling to clarify in respect of the Direct Recapitalisation Instrument of the ESM, to outline the precise mechanism by which a retrospective recapitalisation will take place if a successful application comes from Ireland and whether any retrospective recapitalisation will be subject to the same rules as any other recapitalisation.

“I have also asked Mr Regling to confirm whether Ireland would have to satisfy the four criteria for a direct recapitalisation as set out in the June 24th (2014) statement of the EU Council and how in each case that can be established retrospectively.

“Further to that I have asked him to clarify what influence the current situation of Ireland would have on any decision to retrospectively recapitalise.

“Finally, in the interests of fostering an open and fully informed debate in Ireland, I have asked Mr Regling to give the opinion of the ESM on the likelihood of any decision and consequent actual retrospective recapitalisation being taken within the next couple of years.

"I am hopeful for an early and positive response from Mr. Regling. One way or another I intend to use my position on the Economic & Monetary Affairs Committee to continually raise the need for Irish bank recapitalisation.”

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