asked the Minister for Finance the amount and terms on which loans or grants are to be made available to Ireland (a) from the EEC, and (b) as a result of bilateral negotiations, in connection with our entry to the EMS.
Ceisteanna—Questions. Oral Answers. - European Monetary System.
7.
I will deal first with the Community measures. At their meeting last December, the European Council decided in favour of Community measures designed to strengthen the economies of the less prosperous member states participating in the EMS. Under these measures, loans of up to 333 million European Units of Account—that is £225 million—per year from the European Investment Bank and the New Community Instrument (Ortoli Facility) are being made available on special conditions to Ireland over a five-year period. These loans, which are to be concentrated on the financing of selected infrastructure projects and programmes, are to be subsidised, at a rate of 3 per cent. The value of these interest subsidies will be about 67 million EUA—£45 million—per year over the five-year period; a total of £225 million. The subsidies will be payable to Ireland on a capitalised basis with their full value being paid over when the loans are borrowed.
With regard to the bilateral transfers which our Community partners have agreed to make as a result of negotiations, the position is as follows. The transfer from the Federal Republic of Germany is conditional on the Government raising at least DM 150 million—£37 million—by way of long-term loans from German credit institutions in each of the years 1979 and 1980. The 1979 borrowing has been completed and the first instalment of the bilateral aid, equivalent to about £13.3 million, is to be paid on 2 July 1979. A similar payment will arise in 1980.
The necessary financial protocol with the French authorities was signed on 27 April 1979. The bilateral aid is to include certain trade credits at reduced interest rates and a 23-year loan to the Government at a rate of interest of 3 per cent per annum and a moratorium of ten years on repayment of capital. The availability and amount of the loan are conditional on the purchase of French goods and services related to the execution of industrial or infrastructural projects. The process of identifying suitable projects is in hands.
The bilateral transfers from the Netherlands, Belgium and Denmark are expected to amount to 6 million EUA—some £4 million—in each of the years 1979 and 1980. It has been agreed in principle that it will not be necessary for the Exchequer to raise loans specially in these countries in connection with the transfers. The Dutch and Belgian authorities have indicated that their Ministers will be writing to me shortly regarding the detailed arrangements for making the transfers. The Danish authorities have indicated that the transfer arrangements will be completed when the arrangements for the transfer at Community level have been finalised.
Did the Minister say that the resource transfers must be wholly used for infrastructural purposes? If so, this is a contradiction of what the Taoiseach said last December when he came back from the summit meeting.
I presume the Deputy is speaking of loans.
Yes.
I said that these loans were to be concentrated on the financing of selected infrastructural projects and programmes.
They need not be used exclusively for infrastructural projects.
Not exclusively but mainly.
On that occasion the Taoiseach said he had been given an assurance that the arrangements for the payment of the interest subsidy would be so flexible that it could be paid to us early in the new year. Have we got any of that money?
I am not quite sure to what the Deputy is referring.
The interest subsidy.
The original programme envisaged the adoption of the regulation on interest subsidies by 1 April. In fact, it has not been adopted as yet. It is still being examined by the Council of Ministers. Since the regulation has not been completed the interest subsidies have not been paid. It looks as though the first item of receipt in that regard will be on foot of the bilateral arrangement with the Federal Republic of Germany where the sum involved, £13.3 million, is to be paid on 2 July.
That is a separate arrangement from the one agreed with the Council. When are we to get interest subsidies from the Community?
I would think very shortly after the regulation is adopted. The adoption of the regulation is held up at the moment because of a certain stance being taken by the British Government. That stance may well be clarified at the forthcoming meeting of the European Council which is to take place tomorrow and Friday, as a result of which the regulation could be adopted very quickly at the next meeting of the Council of Ministers.
The Taoiseach said he had been given an assurance that the arrangements were flexible enough to allow this interest subsidy to be paid to us early in the new year. Was that assurance worthless? Did the Taoiseach misinterpret what was said to him or has the assurance been forgotten about at this stage?
I cannot comment on that because I am not aware of and do not recall the Taoiseach having said what the Deputy attributes to him.
It is recorded in column 1988, Volume 310, of the Official Report.
I recall the Taoiseach saying he had been assured that the arrangements in regard to the subsidies were flexible enough to allow their application for various items. Some people had thought it would be restricted to infrastructure.
The Taoiseach stated:
I have also been assured that there will be sufficient flexibility as to the manner in which the interest subsidies operate to enable us to benefit fully from these arrangements early in the new year.
Quotations are not permitted at Question Time.
Did these assurances mean nothing? Did the Taoiseach misinterpret what was said?
The Deputy will be aware of the difficulty which has arisen in regard to the British effort to be treated as a less prosperous member country and to be given access to interest subsidies as such a country. That difficulty has arisen since the arrangements were made.
Is it not true that the British stated their position on the EMS and their possible membership in the future at the summit meeting before Christmas?
No, that is not so. They stated they were not entering at that time and indicated they might possibly enter later. Given that the British were not entering at that time, decisions were made at the summit in regard to interest subsidies and their allocation as between Ireland and Italy, and there was no question of any allocation to Britain.
The Minister will recall that he and the Taoiseach toured some capitals before Christmas to find out the position regarding Ireland and the EMS. Was he not assured at that time by the British Prime Minister that they would do nothing to stand in the way of Ireland's getting a transfer of resources and the interest subsidy?
Yes.
The Taoiseach gave an assurance in this House that the money would come to us early in the new year. I am not trying to trip up the Minister; I merely want to know why we have not received this money. Did these assurances mean nothing?
The Chair has ruled that the Deputy is not entitled to quote. However, my recollection of what he quoted does not amount to the Taoiseach having told us we would get this money in the new year. That is not what he quoted the Taoiseach as saying. As I have indicated to the House, the reason for the delay is the attitude which has been adopted by the British authorities in regard to the regulation. There is a reasonable hope that it will be sorted out within the next few days and there is no reason to believe that the moneys coming to us will not be available in this financial year, which is important.
Question No. 8.
One last question.
This is tantamount to debate and argument.
Would the Minister not agree that everything in relation to the EMS has been bungled and mishandled by the Government? It was never clear at any stage that the Government understood what was being said to them.
(Interruptions.)
I certainly do not agree. It was quite clear from the contributions made on that side of the House——
Do not go back over that again.
I know the Deputy would not like me to go back. He does not want us to recall what was said on that side of the House. It is quite clear from the debates that if the people over there had been in charge we would never have had the opportunity of getting into the EMS.
You did not know if you were coming or going.
Now Deputy Harte is changing his tune as to what should have been done. Deputy Barry wanted us to take the wider margins which would have enabled us to maintain the link with sterling for less than a fortnight longer than we did. It emerged that the issues involved, which are extremely important for the future of this country, were totally misunderstood or misrepresented on that side of the House.
The Minister is not even impressing the three other Ministers beside him.
We are not impressed by your democracy in action. You are the only people to be heard in this House. You are substituting noise for logic. You are good at that.
A Cheann Comhairle, with your permission I should like to raise on the Adjournment this evening the general position of the EMS and our break with sterling.
I will communicate with the Deputy.
(Interruptions.)
Will you please behave yourselves, gentlemen?
They can table any question they like and I will deal with it.
(Interruptions.)