Angela Merkel declared last Friday during the EU summit that direct recapitalization for the EU banks would not be retroactive, that “legacy” bank debts would not be covered by the ESM. This angered Irish authorities, as Ireland is already paying substantial interest on its banking bailout. They requested a phone call with the Chancellor on Sunday, during which the unique causes of the financial crisis in Ireland were discussed, as well as the country's willingness to fully return to the markets.
According to the joint statement issued after the meeting, Merkel and Kenny “reaffirmed the commitment from June 29th to task the Eurogroup to examine the situation of the Irish financial sector with a view to further improving the sustainability of the well performing adjustment programme. They recognise in this context, that Ireland is a special case, and that the Eurogroup will take that into account.”