Vol. 542 No. 6
76 Mr. Wall asked the Minister for Finance if he or officials from his Department have been in contact with the European Commission in relation to the provision of state aid to Aer Lingus; and if he will make a statement on the matter. [25368/01]
As the Deputy is aware, responsibility for Aer Lingus rests with my colleague, Deputy O'Rourke, Minister for Public Enterprise. Yesterday, the Minister gave a comprehensive reply to the House outlining the position adopted by the Government in relation to the Aer Lingus viability plan.
I have had an involvement in the provision of emergency insurance cover for airlines, airport operators and service providers. In the aftermath of the terrorist attacks in the US, the insurance industry decided to withdraw insurance cover for war risk at short notice. This would have grounded all airlines unless some alternative form of cover could be provided. Arising from this, the informal ECOFIN meeting, in Liege on 22 September, which I attended, adopted a set of guiding principles on intervention for insurance problems by airline companies.
Under the guiding principles, member states were authorised to provide liability cover to airline companies to address the short-term failure in the commercial insurance market. The guidelines provided that a "reasonable premium" should be charged for this cover, though it was agreed that this could be waived in the short term and finally, it was agreed that schemes should be introduced initially for a period of one month with work continuing on a sustainable solution to encourage industry to return to the market as soon as possible.
In accordance with these guidelines, the Government approved the issue of a letter of comfort to the Irish licensed airlines, airport operators and service providers, which provided cover for war risks for an initial period of 30 days, subject to certain limits. The Government also gave a commitment to introduce appropriate covering legislation as soon as possible. The preparation of this legislation is being pursued by the Department of Public Enterprise as a top priority. The course of action followed by Ireland is broadly in line with the approach taken in other member states.
Have officials from the Department of Finance been in touch with the Commission in Brussels concerning the operation of the state aid rules? Can the Minister reaffirm the view of his colleague, the Minister for Public Enterprise, that the response of the Commission was unacceptable in that it was unwilling to permit state aid to Aer Lingus?
On the question of state aid, my only involvement with this matter related to airline insurance. This came up at the informal ECOFIN meeting on 22 September. A few days before that insurance companies informed airlines that they were no longer willing to cover them from the following Monday night. Due to the colossal figures that could be involved, this was dealt with at the informal ECOFIN meeting and we issued a statement setting out the guiding principles.
Over that weekend, my departmental officials liaised with officials at the Department of Public Enterprise and arising from that a letter of comfort was issued to airlines and service providers in Ireland regarding insurance. At that informal ECOFIN meeting, the guiding principles were laid out in such a way that even the provision of airline insurance would not contravene state aid and that was the context in which state aid was discussed. After the meeting, some Ministers gave their views on state aid in the general context of airlines.
Officials at the Department of Public Enterprise along with the Minister and the Commission have been dealing with the general Aer Lingus problem and I have not been involved in that.
I reiterate the point made by Deputy McDowell. The intransigence and unbelievable stand of the European Commission will make it much more difficult for this country to reverse the decision on the Nice treaty. It has reinforced the impression that it is completely out of touch with reality.
Does the Minister accept that Aer Lingus is now suffering from an act of war, so declared by the United States government and its other allies? Does he accept that the European Commission is using competition rules to ignore this act of war and its consequences for Aer Lingus? Does he accept that the demise of Aer Lingus and other European airlines would be yet another trophy for the terrorists?
Does the Minister accept that selling Aer Lingus or part thereof in present circumstances is a forced sale, the proceeds of which are bound to be inadequate to meet the survival needs of Aer Lingus? In consequence, does he accept the Government should seek from the European Commission a once and for all change in the law specifically to deal with the consequences of 11 September so that there could be no suit on competition grounds except in connection with 11 September. Bearing in mind the Commission has asked us to pass seven Bills before Christmas, is it not reasonable to ask it to change the competition rules in this specific instance?
I wanted to bring Deputy McDowell in but unfortunately I will be unable to do so as Deputy Mitchell has gone over his time.
As the Deputy is aware from a debate with the Commission earlier in the year, I have had considerable experience of the Commission acting in a manner, which I thought to be incorrect and unjust. I am delighted that Deputies now seem to agree with my stance at that time.
The Minister for Public Enterprise, Deputy O'Rourke, has addressed this matter in the House on many occasions in recent days. Yesterday she spent an hour and 40 minutes answering questions. The Taoiseach dealt with this matter this morning on the Order of Business and on previous occasions. We have outlined the proposal put to Government yesterday and the Government's strategy. It is in everybody's interest to ensure we have a viable Aer Lingus in the future. As the Taoiseach and the Minister for Public Enterprise have repeatedly said, that debate on Aer Lingus will continue into the future.
