The Taoiseach says the promise agreed at the June European leaders summit to break the link between sovereign and banking debt has been reaffirmed.

However Enda Kenny admits the issue of a deal on Irish legacy banking debt has not yet been discussed at the latest 2-day gathering of the 27 leaders which concludes today.

Last night in Brussels the group agreed proposals to set up a single Eurozone banking supervisor next year.

Read a communiqué from the EU Commission on the banking union here

It followed lengthy talks which ended overnight.

A political framework to allow for the move is to be drawn up by the end of the year with its gradual implementation sometime in 2013.

Speaking in Brussels the Taoiseach Enda Kenny is welcoming the decision and that his colleagues reaffirmed the pledges of the June 29th deal.

However he admits the issue of a deal on Irish legacy banking debt has not yet been addressed.

While speaking through an interpreter the German Chancellor Angela Merkel has suggested thatany deal on bank debt is further into the future.