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Paschal Donohoe has called for the main euro area rescue fund to be available to finance bank bailouts, including in EU states that do not use the single currency.
The Irish Minister of Finance has joined the Ministers of the Czech Republic, Denmark, Estonia, Finland, Latvia, Lithuania, the Netherlands, Sweden and Slovakia to request this change.
The main economies of the euro area: Germany and France, as well as Italy, are notably absent from the group.
The incentive to use the European Stability Mechanism as a last resort in the case of bank resolutions – the term referring to managed closures of bankrupt lenders – would be a significant change for the relief fund.
It was created after the crash to raise money on the markets as part of transactions underwritten by all euro area member states, to provide a lender of last resort to countries such as Ireland and Greece.
The new system would expand its role by providing a European bailout fund for savers in the event of bank failures, if national savings guarantee schemes needed additional funds.
It is likely that Member States will still have to repay the funds used. The financing of the savings guarantee has for years been the subject of discussions at EU level under the so-called "Banking Union", but any attempt at cost-sharing between countries has aroused particular resistance from Germany.
However, in a joint statement, ministers, including Paschal Donohoe, said the ESM could and should be adapted to the task.
"The ESM should support the Single Resolution Fund of the Banking Union, which is also open to member states not belonging to the euro area," they said in a joint statement.
The expanded role would be in line with the initial decision to establish the MES, they said.
"The initial configuration of the ESM reflected the urgency of the crisis and the need to act quickly.In a complete EMU, however, a strengthened role for the MES increases the credibility and effectiveness of the framework. crisis management. "
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