France backs retroactive Irish bank support: Hollande

PARIS Mon Oct 22, 2012 10:40am EDT

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PARIS (Reuters) - France backs a retroactive recapitalization of Ireland's banks, President Francois Hollande said after talks with Irish Prime Minister Enda Kenny on Monday, adding that its banking sector should be treated as "a special case".

German Chancellor Angela Merkel has said euro zone rescue funds cannot recapitalize any bank until a euro zone banking supervisor is fully operational late next year.

However, she and Kenny issued a joint statement on Sunday affirming that Ireland's bank rescue was a "special case" and that euro zone leaders would examine ways of improving it.

"The Irish specificity is that for several months there had already been a recapitalization of banks via the budget which worsened Ireland's debt and forced it to impose a tough plan." Hollande said after talks with Kenny.

"I said Ireland was a special case and should be treated as such," Hollande told reporters after the meeting.

When asked if recapitalization could be back-dated Hollande said: "Yes, recapitalization already took place through their own funds so the Euro Group will take that into account."

The Euro Group is the body regrouping the 17 nations of the euro single currency zone.

(Reporting By Daniel Flynn; editing by Mark John and John Irish)

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