Taoiseach Enda Kenny said it was always his understanding that a pledge by EU leaders to break the link between sovereign and bank debt referred to debts already built up - and not future liabilities.
In Brussels this morning for talks between the Government and the European Commission, Mr Kenny said he would use Ireland's presidency of the EU to advance the "banking union" initiative if agreement was not reached this year on a bank supervisor for the euro zone.
Mr Kenny reiterated his demand for EU leaders to come good on their promise at the June European summit to review Ireland's bank bailout.
The Taoiseach's position is directly at odds with that of Germany, Finland and the Netherlands, whose finance ministers said last week that member states should remain on the hook for most bank debts even after the ESM bailout fund makes direct bank recapitalisations.
While the three countries said the ESM should bear responsibility only for future losses, Mr Kenny said this was not what he took from the summit decision.
"Clearly, the decision of the European Council was based on fact and on the evidence before the eyes of the leaders of the 27, and it wasn't in my view based on problems that might arise some time in the future," Mr Kenny told reporters in Brussels.
"Clearly there are problems with a number of countries and those problems have arisen over a past period of time, so in that sense the understanding here was that the decision of the council was to deal with problems on the table now and that have arisen in the past. Clearly there are others that will arise in the future.
"But the decision of the council was to break the link between sovereign debt and bank debt so that banks could be recapitalised directly, and at the same time, a second part of that decision was to review the capacity of Ireland to meet its debt - and that Ireland would receive similar treatment in terms of any other countries."
The Taoiseach is being accompanied to Brussels by 10 Government figures: Tánaiste Eamon Gilmore, Minister for Finance Michael Noonan, Minister for Public Expenditure Brendan Howlin, Minister for Jobs Richard Bruton, Minister for Social Protection Joan Burton, Minister for Communications Pat Rabbitte, Minister for the Environment Phil Hogan, Minister for Agriculture Simon Coveney, Minister for Transport Leo Varadkar and Minister of State for European Affairs Lucinda Creighton.
Mr Gilmore held a brief one-to-one meeting with Jose Manuel Barroso, chief of Commission, before 11 Irish ministers joined the college of 27 European commissioners for talks on the Irish presidency, which begins in January. He meets Herman Van Rompuy, president of the European Council, this afternoon.
Separately, Tánaiste Eamon Gilmore will hold a private meeting with EU foreign policy chief Cathy Ashton. Mr Gilmore said it was important not to equate a statement made by three ministers with the formal decision taken at the summit in June.
"The European council made a very clear decision, that decision was to separate bank and sovereign debt, and that decision also made specific reference with arrangements being made for Ireland in view of our performance on the programme," the Tánaiste said.
Mr Kenny said it may well be that the effort to set up a new euro zone bank supervisor by the end of the year is not successful.
"What I am saying is that in the context of European discussions, one can never determine in advance where there might be a delay for whatever reason," the Taoiseach said.
"All I am saying is that in the event that this is not dealt with before Ireland assumes the presidency, obviously this is an issue that we would run with very strongly in order that the decision of the council is implemented, and that obviously includes banking."
He added: "You can take this that we will emphasise very strongly with our colleagues what the agenda for Ireland here is and that's an agenda of stability of growth and of jobs, because you can't have growth and jobs unless you have stability.
"That's why it is particularly important that there be a real emphasis placed here on bringing through to a conclusion the clear, unequivocal decision made by the European Council on the 29th of June in regard to the breaking of the link between sovereign debt and bank debt and in regard to the review of Ireland's capacity to meet its debts in terms of sustainability."
