European Commission: Spirit of statement on debt should be respected
European Commission HQ
The European Commission's Economic and Monetary Affairs spokesperson Simon O'Connor said that the Commission is fully behind the agreement made at the June summit.
At that summit, EU leaders agreed to use the ESM bailout fund to directly recapitalise banks.
Since then however, some EU Finance Ministers have said that this should only be applied to future debt, rather than legacy debt - a move which would have a negative impact on Ireland.
"From the Commission's point of view, the important thing is that the spirit … of the June summit statement should be respected, which is that the link, the vicious circle, between banking and sovereign risk should be broken," he said.
"As regards the sustainability of the Irish programme, there's a commitment [that] has been made to explore possibilities to enhance that sustainability.
"There's a lot of technical work that is underway."
Taoiseach Enda Kenny will meet with his EU counterparts in Brussels later where he is expected to push for the implementation of those agreements.
Junior Finance Minister Brian Hayes said that the Government is confident that a deal can still be reached, but refused to put a deadline on any agreement.
"The Minister for Finance has said that we're confident that we will get a deal, particularly on the promissory note issue, which is the Anglo legacy debt issue," he said.
"And as to the other issue, which is the ESM funding of the banking sector, we're also confident we can get a deal there, but we're not putting timelines on that."
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