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Cypriot finance minister Kikis Kazamias, left, will host a meeting of the EU's finance ministers in Cyprus today. Virginia Mayo/AP
Banking deal

Quest for bank debt deal to continue at Cyprus ministers' meeting

Michael Noonan will meet his counterparts from around Europe in Cyprus today, hoping to make progress on shedding Ireland’s bank debts.

MINISTER FOR FINANCE Michael Noonan will encourage his counterparts from around the European Union to make progress on a deal splitting Ireland’s banking and sovereign debts as he attends a two-day summit in Cyprus today.

Noonan is likely to encourage European finance ministers to implement an agreement struck three months ago in allowing Ireland’s bank debts to be taken off the sovereign books, with all Eurozone states jointly liable for it.

The two-day summit in Cyprus, which currently holds the European Council presidency, follows bilateral meetings between Noonan and his counterparts in France, Germany and Italy earlier this week.

The Department of Finance said those meetings had been “part of the ongoing talks building on the summit agreement in June”.

A deal to split the bank and sovereign debts had originally been earmarked for the end of October, but so far little concrete progress has been reported.

In the last few days the government has sought to play down the timeline for a deal, though it will be keen to have the arrangement finalised as far as head of the Budget as possible.

The meeting is also likely to see ministers have their first discussions on responding to Wednesday’s ruling of the German constitutional court in which Germany’s contribution to the European Stability Mechanism, the eurozone’s new bailout fund, was capped.

That ruling may require minor amendments to the treaty, which could result in parliaments having to approve amendments to the treaty before it can be brought into effect.

Also on the agenda for discussion is a provisional agreement to allow Cyprus recapitalise its own struggling bank sector – a matter which will tie into Ireland’s own talks, given the linkage drawn between the state and its banking sector.

Read: Michael Noonan set to meet with EU finance ministers

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