Advertisement

We need your help now

Support from readers like you keeps The Journal open.

You are visiting us because we have something you value. Independent, unbiased news that tells the truth. Advertising revenue goes some way to support our mission, but this year it has not been enough.

If you've seen value in our reporting, please contribute what you can, so we can continue to produce accurate and meaningful journalism. For everyone who needs it.

Minister for Finance Michael Noonan chaired the meeting. Julien Behal/PA Wire

EU finance ministers fail to agree on who should pay for bank bailouts

The 27 EU ministers will meet again Wednesday to try and finalise a decision.

EUROPEAN UNIONS FINANCE Union finance ministers failed early today to reach an agreement on how to close down failing banks before they can do too much damage to the wider economy.

This resolution mechanism would have marked another important step toward a ‘banking union,’ the new overall EU regulatory framework meant to restore the banking sector to health and so prevent any repeat of the bloc’s debt crisis.

“We ran out of time … it is a very complex issue,” said Irish Finance Minister Michael Noonan, who chaired the meeting.

“We made significant progress and differences were narrowed … but core issues were still to be resolved,” Noonan added after marathon talks which broke up in the small hours of Saturday.

The 27 EU ministers will meet again Wednesday to try and finalise an accord before an EU leaders summit on Thursday and Friday, he added.

Winding up a problem bank

After 18 hours of talks, the main sticking points were over how much the home country and creditors would have to contribute to the cost of winding up a problem bank.

Noonan said some non-euro states naturally wanted more flexibility because they did not have access to rescue funding from the European Stability Mechanism, the eurozone’s backstop.

At the same time, some eurozone states also wanted more leeway, among them France while Germany favoured a much tighter regime, EU sources said.

France and Britain argue that rather than simply making all creditors pay their share, they should have discretion over who to include.

A large company that is ‘bailed-in’ because of its exposure to a failed bank might be weakened as a result and this could have a harmful knock-on effect on the economy.

Initially, the “talks introduced more flexibility but as they went on, that went too far for some,” one EU source said as the talks broke up.

Hopes had been high that ministers would reach a deal to compliment a eurozone accord Thursday on how the ESM could inject funds into banks needing fresh capital but without adding to the already huge debt burden of member states.

The two instruments were combined in the Banking Recovery and Resolution Directive (BRRD) that ministers discussed.

Asked if the failure Saturday to agree the resolution instrument invalidated Thursday’s accord, Noonan stressed that it did not.

Tax-payers have paid €4.5 trillion so far

Up to now, the taxpayer has paid for most of the state and bank bailouts – a massive sum put at €4.5 trillion for the 2008-11 period which has stoked growing popular disquiet and added to debt levels.

To address this problem, the EU, the European Central Bank and the International Monetary Fund in March agreed a Cyprus rescue which ‘bailed-in’ larger depositors in its two biggest banks to pay for their restructuring.

The EU initially set up the €500 billion ESM to bail out member states. But last June, when Spain’s banks looked near to collapse, Brussels extended its scope to allow direct aid for struggling lenders.

- AFP 2013

Related: Noonan: Taxpayers put lots of money into BOI and AIB, now we could get some back>
Read: NAMA and the banks are tapping debtors’ phones and emails, claims TD>

Author
View 43 comments
Close
43 Comments
    Install the app to use these features.
    Mute Michael G O'Reilly
    Favourite Michael G O'Reilly
    Report
    Jun 22nd 2013, 11:01 AM

    Dare I suggest that maybe banks should pay for bank bailouts !!!

    153
    Install the app to use these features.
    Mute Jim Lenihan
    Favourite Jim Lenihan
    Report
    Jun 22nd 2013, 11:23 AM

    the reason they cant agree is fg want the people to pay

    85
    Install the app to use these features.
    Mute Dmc
    Favourite Dmc
    Report
    Jun 22nd 2013, 11:31 AM

    How about we stop the bailouts and let them crash. Other banka will pop up. Bailouts are no good

    82
    See 5 more replies ▾
    Install the app to use these features.
    Mute Culm Carty
    Favourite Culm Carty
    Report
    Jun 22nd 2013, 1:27 PM

    Jim

    A correction if you don’t mind.

    The reason they cant agree is fg want the people’s grandchildren to pay

    35
    Install the app to use these features.
    Mute Barry Scott
    Favourite Barry Scott
    Report
    Jun 22nd 2013, 2:40 PM

    @Dmc agreed 100%, the act of bailing out the banks, and then forcing the people to pay for the bailout, results in people being unable to pay their own personal debt, which in turn leads to more stress on the banks in question, then more charges and taxes etc on the people. It’s a vicious circle.

    36
    Install the app to use these features.
    Mute Jeff Kennedy
    Favourite Jeff Kennedy
    Report
    Jun 22nd 2013, 5:03 PM

    Bailouts are the most effective way to transfer vast amounts from taxpayers to the 1% .Politicians are just the pimps in this process .

    18
    Install the app to use these features.
    Mute Tony Daly
    Favourite Tony Daly
    Report
    Jun 22nd 2013, 6:50 PM

    Politicians and senior civil servants are protecting their munificent pensions and sacrificing the people for that purpose. Pimps is a good description. I can think of worse.

    10
    Install the app to use these features.
    Mute Eamonn O'Riain
    Favourite Eamonn O'Riain
    Report
    Jun 23rd 2013, 2:31 AM

    yeah, in punts, escudos, lira, drachma, and pesetas!
    5 currencies you wouldn’t wipe yer arse with, but the euro (der ubermark) still wobbles on.
    Sickens me to say it, but we should get out of the Euro and apply to peg against Sterling again.
    Thanks Bertie.
    you’d better hope i’m not diagnosed with something terminal any time soon.

    5
    Install the app to use these features.
    Mute Paul White
    Favourite Paul White
    Report
    Jun 22nd 2013, 10:46 AM

    Its probably best they make ireland pay for it all….for every country, sure why not like

    69
    Install the app to use these features.
    Mute Gerry Ryan deG
    Favourite Gerry Ryan deG
    Report
    Jun 22nd 2013, 10:52 AM

    They wont have to make us, our eejits will volunteer

    75
    Install the app to use these features.
    Mute Uncle Mort
    Favourite Uncle Mort
    Report
    Jun 22nd 2013, 10:36 AM

    They WILL rob more bank accounts.

    “Legacy losses will be used as a disciplinary device: Greece, Spain and Ireland will now have to tussle, beg and plead for debt relief regarding the funds already borrowed from the EFSF-ESM for their banks,” said Dr Varoufakis.

    We are in the EUSSR like it or not.

    62
    Install the app to use these features.
    Mute Uncle Mort
    Favourite Uncle Mort
    Report
    Jun 22nd 2013, 10:37 AM

    PS “The deal reached by EMU finance ministers on the use of the bail-out fund (ESM) to recapitalise distressed banks makes clear who will in fact suffer the real losses: first shareholders, then bondholders and then deposit holders above €100,000. They stand to lose almost everything, as we saw with Laiki in Cyprus.”
    From the Daily Telegraph

    38
    Install the app to use these features.
    Mute gerbreen
    Favourite gerbreen
    Report
    Jun 22nd 2013, 4:54 PM

    In AIBs case .. share holders already done … bond holders mostly paid so straight to 3rd level. Deposits will have to be hit well below 100k. Also state will need to invest an amount prior to ESM.

    AIB returning to profit if they disregard the boom era loans .. wow if I disregard them from my budget it looks much better too. Also disregards the pension they need to fund since their disastrous approach to retirement for 50 year old. I dont believe a word they say.

    Popped into local PO today … I intend to do so much more

    The government are incapable … the people are not

    7
    See 2 more replies ▾
    Install the app to use these features.
    Mute Kevin Whyte
    Favourite Kevin Whyte
    Report
    Jun 22nd 2013, 5:36 PM

    The gov owns the post office!!!! LOOK OUT!!!

    4
    Install the app to use these features.
    Mute gerbreen
    Favourite gerbreen
    Report
    Jun 22nd 2013, 9:38 PM

    Yea maybe so Kevin but it seems like a safer bet than aib ptsb esb .. boi hard to judge

    3
    Install the app to use these features.
    Mute Niall Sheridan
    Favourite Niall Sheridan
    Report
    Jun 22nd 2013, 10:58 AM

    Ask a five year old kid. The banks ultimately should. All bailout costs should be recoverable from them in the long term. They shouldn’t get a get out of jail free card!

    58
    Install the app to use these features.
    Mute James Hyland
    Favourite James Hyland
    Report
    Jun 22nd 2013, 10:43 PM

    has A.I.B repaid any of the taxpayer,s money it received in the 1st bailout over 30yr ago,
    i dont believe it has.
    also if banks can chase mortgage holders in arrears why can’t we the taxpayer chase them down for the money they owe us.

    5
    Install the app to use these features.
    Mute Eamonn O'Riain
    Favourite Eamonn O'Riain
    Report
    Jun 23rd 2013, 2:50 AM

    Good point jim.
    Seeing as those bastards have saddled each and every one of us with about €36,000 of their debt I think I’ll stop payin me mortgage for the next 4 years.
    See how that goes down with them!!
    Or maybe i should just follow the government’s lead, and get your grandchildren to pay instead?
    Unlike those miserable f##kers i wouldn’t sleep easy if i did that.

    6
    See 1 more reply ▾
    Install the app to use these features.
    Mute James Hyland
    Favourite James Hyland
    Report
    Jun 23rd 2013, 9:48 AM

    and the reason you wouldnt be able to sleep at night is because you my friend (Eamonn O, Riain) have a conscience and a moral standard which these conmen bankers and i will include politicians because the same politicians are nothing more than chief enablers for the bankers in this do not.
    they have passed motion after motion in our so-called parliament (reichstag kildare st) to facilitate the bankers utter incompetence and a reward for all this incompetence they get fat salaries even fatter pensions, membership of gyms, country clubs and of course the all important golf clubs,
    now what about all these so-call developers getting paid anywhere in the region of up to €250K per year to clear off their debt to us yes folk they get paid it has to be a sick sick mind that thought that 1 up because if you or i cannot pay any loan given to us by a bank the small print says your home is at risk if you fail to pay it back ,
    i dont see many of these developers being kicked out of their home,s do you ??

    3
    Install the app to use these features.
    Mute Declan Conway
    Favourite Declan Conway
    Report
    Jun 22nd 2013, 10:51 AM

    Yep, one happy Union where all are treated equally.
    You can bet that in 10 years’ time, if we get there, the 4.5 trillion debt loaded on to taxpayers will be double that.
    At the very least.

    All it needs now is for someone to shout ‘TIMBER’.

    56
    Install the app to use these features.
    Mute Tony Skillington
    Favourite Tony Skillington
    Report
    Jun 22nd 2013, 12:16 PM

    What do they mean they can’t agree? It’s the same people who pay everytime a politician magnificently f**ks up…..us!

    28
    Install the app to use these features.
    Mute Culm Carty
    Favourite Culm Carty
    Report
    Jun 22nd 2013, 1:24 PM

    Declan

    Yesterday Noonan said he has failed the Irish people in getting back their money from the Irish Banks. Today he fails to do the same for European citizens.

    This man and his Government are nothing short of failures.

    38
    See 3 more replies ▾
    Install the app to use these features.
    Mute Patrick
    Favourite Patrick
    Report
    Jun 22nd 2013, 3:38 PM

    It’s a financial black hole just like anglo ,the ordinary joe knows nothing about anglo yet it managed to suck millions and millions of taxpayers’ money and us none the wiser.

    17
    Install the app to use these features.
    Mute Dermot Purcell
    Favourite Dermot Purcell
    Report
    Jun 22nd 2013, 9:59 PM

    culm might i add criminals to the topic ,our political and judicial system is smashed beyond repair.

    5
    Install the app to use these features.
    Mute Damian Moran
    Favourite Damian Moran
    Report
    Jun 23rd 2013, 1:43 AM

    This government spin everything to try and save face on everything .
    Politics in this country has failed.

    5
    Install the app to use these features.
    Mute BadDrivingIreland
    Favourite BadDrivingIreland
    Report
    Jun 22nd 2013, 12:11 PM

    That’s simple, the bankers that are swanning around Scott free.

    34
    Install the app to use these features.
    Mute Niall Mullins
    Favourite Niall Mullins
    Report
    Jun 22nd 2013, 11:50 AM

    I thought Angela Merkel had already decided that the taxpayers would foot the bill! What a circus.

    28
    Install the app to use these features.
    Mute grease lightening
    Favourite grease lightening
    Report
    Jun 22nd 2013, 10:59 AM

    So, the egomaniac that came up with the ‘euro’. Was it a ‘Eureka’ moment? It clearly was not akin to the constipated mathematician.

    28
    Install the app to use these features.
    Mute Adam Power
    Favourite Adam Power
    Report
    Jun 22nd 2013, 10:38 AM

    Take your time guys, no rush.

    27
    Install the app to use these features.
    Mute Jim Hartnett
    Favourite Jim Hartnett
    Report
    Jun 22nd 2013, 1:23 PM

    Whatever is done will only be done at the behest of Commandant Merkel. What the German’s didn’t do with tanks, they are now doing with banks.

    24
    Install the app to use these features.
    Mute Declan Hickey
    Favourite Declan Hickey
    Report
    Jun 22nd 2013, 2:09 PM

    A bit unfair to say that. But with the evidence so far it’s not untrue.

    10
    Install the app to use these features.
    Mute JakkiB
    Favourite JakkiB
    Report
    Jun 22nd 2013, 11:50 AM

    Wow! Cant make up their mind since 2008…..

    19
    Install the app to use these features.
    Mute Dermot Murphy
    Favourite Dermot Murphy
    Report
    Jun 22nd 2013, 1:40 PM

    Wan##ng bankers

    15
    Install the app to use these features.
    Mute sean
    Favourite sean
    Report
    Jun 22nd 2013, 4:49 PM

    Sweet mother of science, these gangster are taking the piss,
    Taxpayers paid 4.5TRILLION and it still ain,t sorted , ……sorry i,m confused combine how much was paid to all the bankers in question between 2008 and 2011, in the billions i reckon .
    Time ro just let them fail , sack and jail all those involved , hit the reset button and start again.

    With that 4.5 trillion wr could have relieved the world of poverty and starvation

    10
    Install the app to use these features.
    Mute Declan Hickey
    Favourite Declan Hickey
    Report
    Jun 22nd 2013, 12:49 PM

    Who does it benefit with no deal?

    9
    Install the app to use these features.
    Mute Culm Carty
    Favourite Culm Carty
    Report
    Jun 22nd 2013, 1:25 PM

    Bankers

    14
    Install the app to use these features.
    Mute Francis Stokes
    Favourite Francis Stokes
    Report
    Jun 22nd 2013, 4:18 PM

    Its like throwing money into a bottomless pit. They will never solve the problem it has gone to far. Why should the tax payer have to pay for the mistakes of some. The banks are partly responsible for the current situation so they should carry some of the Burden.MIS MANAGEMENT IN THE BANKS HAVE CAUSED THIS AND THOSE RESPONSIBLE HOLD BE BROUGHT TO ACCOUNT

    7
    Install the app to use these features.
    Mute Joe Read
    Favourite Joe Read
    Report
    Jun 22nd 2013, 7:27 PM

    jeez mick noonan the poor will pay you silly billies .Done deal spit on me hand

    5
    Install the app to use these features.
    Mute Tony Daly
    Favourite Tony Daly
    Report
    Jun 22nd 2013, 6:47 PM

    We must continue to sacrifice more to the great god banks, makers of our world. We must avert their wrath. We must not question the policy of protecting the banks. Never challenge orthodoxy. Accept without question the need for the banks.

    5
    Install the app to use these features.
    Mute Kerry Blake
    Favourite Kerry Blake
    Report
    Jun 22nd 2013, 12:47 PM

    Good news maybe if they cannot agree it means we (Ireland) may not be due another bail out soon.

    5
    Install the app to use these features.
    Mute Tony Daly
    Favourite Tony Daly
    Report
    Jun 22nd 2013, 7:15 PM

    Bono has offered to pay. He likes banks, especially but not only off shore banks.

    4
    Install the app to use these features.
    Mute gerbreen
    Favourite gerbreen
    Report
    Jun 22nd 2013, 9:46 PM

    A friend who lost job recently and who may come under pressure from his bank asked me how many bankers have paid the ultimate sacrifice and took their life? I could recall just one. How many people on the other side of banks mismanagement? I had no idea. More than one though. Just another angle …

    2
    Install the app to use these features.
    Mute Dermot O'Reilly
    Favourite Dermot O'Reilly
    Report
    Jul 9th 2013, 2:02 PM

    Germany forced the Fianna Fáil led Irish Government to rescue the German Banks Bondholders in Irish Banks.

    Such Bondholders are/were unsecured creditors!

    The innocent Irish Taxpayers are now paying the price of “reckless trading” by greedy Irish Bankers , developers and Bankers !

    This is NOT justice!

    Meanwhile NAMA is paying many greedy developers and builders significant salaries !

    Is this justice?

    1
Submit a report
Please help us understand how this comment violates our community guidelines.
Thank you for the feedback
Your feedback has been sent to our team for review.
JournalTv
News in 60 seconds