Dáil Éireann Debate, Tuesday - 14 November 2023
131. Deputy Ged Nash asked the Minister for Finance to outline how much Ireland received under the SURE EU programme; to confirm how these funds were used; what auditing was required under the EU facility; how the funds were accounted for in the GGB; what the repayment schedule for the loans are; what the interest rate is on the repayments; and if he will make a statement on the matter. [49847/23]
View answerIreland received a total of €2.492 billion on 30 March 2021 under the SURE EU programme.
SURE, which stands for Support to mitigate Unemployment Risks in an Emergency, was a specific financial instrument created by the European Union to protect jobs and workers’ incomes in the context of the COVID-19 pandemic.
The European Commission provided low cost loans to nineteen Member States to support sudden increases in public expenditure for the preservation of employment, thereby protecting citizens and mitigating the severely negative socio-economic consequences of the Covid pandemic.
The amount of the Irish application was based on costs already expended by the Government as part of the Covid-19 Temporary Wage Subsidy Scheme (TWSS), which satisfied the conditions for the SURE programme.
The Temporary Wage Subsidy Scheme provided wage bill subsidies to support firm viability and preserve relationships between employers and employees. When the scheme ended in August 2020, nearly 70,000 employers and over 600,000 employees had been supported.
As the Temporary Wage Subsidy Scheme (TWSS) has already ended by the time of disbursement of the SURE loan to Ireland, Ireland did not have any ongoing reporting requirement to the European Commission on the implementation of this planned public expenditure.
Ireland was able to recoup the substantial majority of the expenditure already accrued under the Temporary Wage Subsidy Scheme (TWSS) from the SURE programme. The cumulative value of payments made to employers under the TWESS was €2.693 billion, and the total cash paid in to the Irish Exchequer in 2021 from the SURE is €2. 492 billion.
SURE provided Ireland with a diversified source of funding with the benefits of the EU’s strong Triple A credit rating (AAA) and low borrowing costs. As of October 2023, Ireland's SURE lending has a weighted average life of 12.1 years and a European Commission fixed interest rate of 0.22%.
The SURE funding is cash neutral for the EU, with the Commission passing through the low cost of borrowing, and recouping the legal and administrative fees on the loans.
The overall impact on the expenditure side of the Irish Exchequer will be the cost of servicing the proposed SURE loan over the term of that loan.
The total cash paid in from the SURE EU Programme to Ireland, net of bond syndication fees and EU cost recovery is €2,492,622,814. The loan is made up of two tranches: (i) a 5 year loan and (ii) a 25 year loan.
The 5-year loan has a principal amount of €1,273,000,000, which matures in March 2026 and has a zero coupon. Therefore no annual interest payments are due to the bondholder. The bond behind the loan was issued above par therefore Ireland has received more in cash than it will be required to repay on maturity – this creates a negative yield.
The 25-year loan has a principal amount of €1,200,000,000, which matures in May 2046 and has an annual coupon to the bondholder of 0.45%, starting in May 2022. The first coupon is for more than one year’s accrual (covering the period March 2021 – May 2022) and will be for €5,892,000; and the annual coupon payments thereafter will be €5,400,000.
