European write-down on Irish debt still possible - Hayes

Newly-elected Fine Gael MEP Brian Hayes has insisted the Government can still secure a deal on Ireland's debt at European level.

Mr Hayes, who will be Minister of State at the Department of Finance until the Cabinet reshuffle, said he did not accept that a write-down was now impossible.

"What is important is that we use whatever power we have to make Ireland's case here in the European Parliament, " he said.

Mr Hayes said he accepted a deal on bank debt would be “politically challenging and difficult”, but said it remained technically possible.

Minister for Finance Michael Noonan was continuing to explore options with European colleagues, Mr Hayes told RTÉ.

He suggested once banking union was established the process would be easier.

The European Parliament and the European Council were responsible for putting banking union in place, he said, "and we were never going to get the full instrument of the ESM working until the banking union was in place".

The “final pillar” had yet to be put in place, he added.

"We've got to work with all the institutions to make the debt position in Ireland better. It may not come directly by debt write-down, it may come by another means."