I refer the Taoiseach to the joint statement of the Ministers for Finance from Germany, Finland and Holland on the separation of bank debt from government debt and the June European Council decision. By any reading of the statement, it must be seen as a grave disappointment and extremely depressing in terms of their interpretation and understanding of the June deal and their articulation of principles which will govern the so-called separation of bank debt from sovereign debt. Alarmingly, they describe the role of the European Stability Mechanism, ESM, in recapitalising banks as a longer term issue. They state, "Regarding longer term issues, we discussed basic principles for enabling direct ESM bank recapitalisation, which can only take place once the single supervisory mechanism is established and its effectiveness has been determined". It is not that it can take place when it has been established; we have to wait to see if it is effective before recapitalisation can take place. The statement continues:

The ESM can take direct responsibility for problems that occur under the new supervision, but legacy assets should be under the responsibility of national authorities ... the recapitalisation should always occur using estimated real economic values.

This latter point will have real implications for us. The statement then goes through the basic order of bank recapitalisation of, first, using private capital, then national public capital and, only as a last resort, the ESM. Mr. Karl Whelan, an economist who enjoys acceptance across the House, has interpreted this as a message from the three countries to Ireland and Spain to drop dead. By any analysis, it is either a significant resiling from, or a different interpretation entirely of, the decision at the June meeting.

Has the statement come as a surprise to the Taoiseach and the Minister for Finance, Deputy Michael Noonan? Did he have any inkling at all that it was coming? Last week in the Dáil the Taoiseach confirmed to me that since the June meeting he had only met the Slovenian Prime Minister. He has not met the Dutch or Finnish Prime Minister or the German Chancellor. Clearly, the grass has grown under his feet since the June summit meeting. It speaks of an approach that he has adopted to avoid hands-on negotiations himself or direct engagement with other leaders who are key to the working out of the eurozone crisis. Will he commit to undertake an urgent diplomatic initiative with the Prime Ministers of the three countries to have a clear and honest articulation of what they are prepared to do to genuinely separate bank debt from sovereign debt?

We are over time.

As Mr. Whelan said, the statement reinforces the vicious link between bank debt and sovereign debt.

First, it is important to appreciate the scale of the challenge the European Union and the eurozone faces. We are now in the fourth year of economic challenges and difficulties. The Deputy spoke of a clear and honest articulation. My job as Taoiseach and Head of Government is to deal with the other 26 EU Heads of Government when they meet in formal session. The decision taken on 29 June at the European Council has been articulated clearly:

We affirm that it is imperative to break the vicious circle between banks and sovereigns. The Commission will present proposals on the basis of Article 127(6) for a single supervisory mechanism shortly. We ask the Council to consider these proposals as a matter of urgency by the end of 2012.

That was the first element of the decision made by the Heads of Government to break the link between sovereign debt and bank debt and to allow for the direct recapitalisation of banks. This was clear without any misunderstanding.

The second element of the decision states:

The Eurogroup will examine the situation of the Irish financial sector with the view of further improving the sustainability of the well-performing adjustment programme. Similar cases will be treated equally.

These were the two decisions made about the eurozone and Ireland specifically. They both stand and will be implemented. They are decisions, without equivocation, made at the meeting of the Heads of Government on 29 June.

As the Deputy will be aware, during the course of negotiations, statements can be made from different perspectives. Last Friday I had the opportunity to meet the Spanish Prime Minister, Mr. Rajoy, the Greek Prime Minister, Mr. Samaras, and the Italian Prime Minister, Mr. Monti. In each meeting we discussed the ongoing negotiations on the implementation of the 29 June decision. That is the position and the one taken by the Irish personnel involved in negotiations, including the Minister for Finance who has had intensive discussions with his counterparts who have been very helpful on Ireland's case. As far as I am concerned, on behalf of the Government, we want to see the clear decision and mandate given by the European Council implemented. That will be the focus and direction of our negotiations. It will be to follow through on the decision made to break the link between sovereign debt and bank debt, to allow for direct recapitalisation of banks and, in the case of Ireland, to improve its capacity to meet its debt problems. As the Deputy will know better than anyone else, it is a deal made in former years that we are trying to unwind.

As the Taoiseach said in June, the European Central Bank and the European institutions imposed a deal on Ireland that was not acceptable at the time. The point is that the Taoiseach has not followed through on the June deal. This is a serious statement by three key players in resolving the eurozone crisis - Finland, Holland and Germany which are all seen as significant contributors.

It is just a position.

It is not a Council decision.

The Taoiseach is correct in terms of his quotations from the summit communiqué. Equally, I have read the statement of the three Ministers for finance. The euro area summit statement, which the Taoiseach did not quote, states "when an effective single supervisory mechanism is established, involving the ECB, for banks in the euro area the ESM could, following a regular decision, have the possibility to recapitalize banks directly". It continues, "This would rely on appropriate conditionality".

Could I have a supplementary question, please?

In other words, it has been clear all summer, particularly from German sources and the Finnish and Dutch positions, that their interpretation of what the decision in June meant is entirely different from that of the Taoiseach and others.

What is your supplementary question?

Mr. Monti has been extremely active all summer-----

The Deputy is over time. Thank you.

Mr. Monti has been extremely active all summer but the Taoiseach has not. He has not followed through on this-----

Sorry, this is Leaders' Questions. Will you put a question, please, Deputy? You are over time.

-----to make absolutely sure that this meant it would be what the Tánaiste said was a game changer.

This is not the time for speeches. Will you put your question?

I am asking a supplementary question. I should not be interrupted like this.

Your are over time and I am going to cut you off in one minute.

I want to make the point. It is not a supplementary question. I have said this 100 times.

It is a supplementary question and it is supposed to be.

It is not, actually. According to Standing Orders, it is not. It is about raising matters.

Excuse me. There is provision for a supplementary question from a party leader for one minute.

I am asking questions on a matter raised. It has nothing to do with supplementary questions. That is in Standing Orders.

Read the Standing Orders.

I have read it and I respectfully suggest-----

Deputy, you are over time.

I object to the Ceann Comhairle's propensity to interrupt on a serious topical issue.

You are over time.

The Ceann Comhairle should not do that.

Sit down for one moment, please. I am not going to take any lectures from you, Deputy, about how I run this Chamber. You are over time. You had one minute to ask a supplementary question. I gave you notice. Please ask your supplementary question.

I have no intention of lecturing the Ceann Comhairle. I ask to be allowed to ask the question without interruption, which the Ceann Comhairle has a propensity to do too much.

You are now two minutes over time.

It is a very serious issue facing the country.

Yes, and I have also granted a topical issue to your spokesperson on finance on this matter.

I put the statement of the three finance Ministers to the Taoiseach. I asked whether he was surprised by any of this but he did not reply. Had the Taoiseach any inkling that this was occurring? I put it to the Taoiseach that there has been no follow-through on our side in respect of what we believed had been agreed in June and what the Tánaiste described as a game changer. It looks far from a game changer now.

Thank you. I call the Taoiseach.

Commentators outside politics have raised the matter. We need honest articulation of what is actually happening.

Would you resume your seat, Deputy? Thank you.

Let me repeat what I said for Deputy Martin. The decision taken by the European Council was made by the Heads of Government of the 27 countries. There was a very clear decision in two parts: first, to break the vicious circle between sovereign and bank debt and allow for bank recapitalisation; and second, to reflect on the capacity of Ireland to meet its debts and provide that equal treatment be given. These were the two decisions about the eurozone and Ireland. Those decisions stand.

Deputy Martin's point is that these decisions are not being followed up. Let me tell Deputy Martin about the extent of negotiations involving Department of Finance officials and their counterparts across the board. They have been intense. Deputy Martin will appreciate that following the decision of 29 June, yields have come down from above 11% to less than 5%. They fluctuate, as we know. The Minister for Finance has followed through directly with his counterparts as recently as two weeks ago in Paris, Rome and Berlin. He has spoken to other Ministers for finance at the informal meeting in Cyprus.

Did they say this in Cyprus?

Would you please allow the Taoiseach to answer, Deputy?

When I spoke last Friday to three Prime Ministers directly involved - Prime Minister Monti, Prime Minister Rajoy and Prime Minister Samaras - they each gave an indication of their progress towards implementing the Council decision. This is not a decision of three Ministers or any other commentators. It is a decision made by the Heads of Government of the 27 countries of the European Union, reflecting the analysis of how to deal with the eurozone crisis. In particular, written into the statement of 29 June was the treatment to be given to Ireland. We will follow through on that statement and on that decision. That is the decision. It is clear and unequivocal; there is no resiling from that decision. Whatever opinions may be given about banking union, the Commission paper presented recently reflects clearly the decision of the European Council.

The challenge and, I suppose, the difficulty for Europe has always been to prove that one has followed through on decisions that were made. The decision of 29 June was not an opinion. It was not a theory or aspiration. It was a specific political decision made not just by Ministers but by the Heads of Government of the Union. It is set out clearly with no equivocation. I expect that decision to be implemented in full and, I hope, in the shortest possible time.