Vol. 395 No. 8
2 Mr. S. Barrett asked the Minister for Industry and Commerce if the export credit insurance scheme and the export credit finance scheme operated here are on a similar basis to those operating in the other EC countries; and if he will outline the financial experience of each scheme in 1988 and 1989.
Export credit insurance and finance schemes offered to exporters by member states vary considerably throughout the Community, reflecting different national traditions in business practice, in exporter needs and in financial arrangements. Moreover, such is the nature of export credit insurance and related finance that what is on offer at any given time within any particular member state — or within any number of member states where broad similarities as between different facets of schemes may sometimes seem to exist — can quickly change depending on the dynamics of risk assessment, buyer activity and demand, market change and financial performance.
For this reason, it is simply not possible to provide a categorical answer, one way or another, to the question put by the Deputy. There are, however, some headings under which it is possible to say that our schemes are, in broad operational terms, similar to those in other member states.
Firstly, as regards our export credit insurance schems our system of operations follows one of two patterns generally pursued throughout the Community, in that — as in the Federal Republic of Germany for example — such insurance activity here is underwritten on behalf of the Government by an agent — that is to say, in our case the Insurance Corporation of Ireland which is my sole agent in underwriting business here. As to the range of cover, this is one area where a great diversity in approach exists, reflecting all the different national elements I have referred to earlier. Essentially, however, all schemes, in terms of cover, have the objective of promoting national exports through (a) insuring against the risk of non-payment by the foreign buyer; and (b) the provisions of State guarantees to facilitate the availability of preferential rate bank loans to finance exports.
As to our export credit finance schemes, such schemes are generally rooted in the principle that the security provided to lending institutions in the form of export credit insurance policies and related State guarantees permit financial institutions to offer finance to exporters at preferential terms. This serves not only to make our exports more price competitive but, often, also to meet the working capital needs of exporters for the next production batch. Again, the variety of different instruments and schemes used vary considerably between member states and to the extent that some other larger member states provide a more extensive and specialised range of financial schems to exporters, this is largely due to the advanced state of their industrial economies which are capable of pursuing major project business of a scale which our industrial sector could not generally meet.
Regarding the financial experience of the schemes in 1988 and 1989, I would remind the Deputy that I am required by section 3 (1) of the Insurance Act, 1953, to prepare accounts for each financial year in respect of the schemes, so that these accounts shall be audited by the Comptroller and Auditor General and laid before each House of the Oireachtas. Accounts for 1988 are currently in preparation and those for 1989 will not be commenced, in accordance with normal criteria, until March of this year. It would, therefore, be inappropriate for me to comment on the financial experience of the schemes for these years until audited accounts are available. They will, however, be presented to the Oireachtas as soon as possible in accordance with the requirements of legislation.
Would the Minister agree that in the context of 1992 and the removal of barriers it is essential that this country have in place a proper export credit finance scheme and an export credit insurance scheme to assist Irish industry to compete with other EC countries that perhaps have better schemes which will help their firms export more than we would be in a position to do? Can the Minister assure the House that assistance will be given and approved under both these schemes to help Irish industry?
We are looking all the time at the improvement of these schemes. It would be very easy to improve them by simply taking far bigger risks, for example, and putting the taxpayer at much greater risk. The schemes are not inexpensive and the risk element is high. Other large and richer countries are able to afford greater risks and accordingly greater losses. Our scheme has been quite successful given the smallness of this country and its economy. We are looking now, particularly in the context of the sale of the ICI, at any possible changes that might be made in the months to come. Certainly it will be my ambition to have the two schemes as streamlined as possible, particularly in the context of the competition that will arise in 1992.
Deputy S. Barrett rose.
Sorry, Deputy, I have to say that the time for dealing with priority questions is well nigh exhausted and there are still two questions to be disposed of. Will you assist me to dispose of the two questions, one fron your good self Deputy and the other from Deputy Rabbitte?
You will appreciate, Sir, that the Minister has taken about 12 minutes to reply to two questions. We have——
The Chair has no control over Ministers' replies but he does have control over Deputies' questions.
Would the Minister not agree that there is a need for a common European approach to the whole business of export credit and export finance schemes so that one country will not be subsidising exports more than another?
That would be the ideal and it is something I hope to see ultimately. Informal consultations between countries in this field are taking place at what is called the Paris Club. There is an EC export credit council working group in existence which examines these problems from the point of view of the Community as a whole. The sooner this particular State aid, like other State aids throughout the Community, is analysed the better and particularly for smaller countries.
Deputy S. Barrett rose.
I am sorry but the time is exhausted. The Standing Orders provide a quarter of an hour for questions on priority and the Chair has an obligation to adhere to that Standing Order unless this House decides otherwise by appropriate action. I am now proceeding to deal with other questions. Question No. 6 please.
It is bad enough to be excluded every second day without being excluded when one has a question on the agenda.
