Dáil Éireann debate -
Thursday, 22 Oct 1992

Vol. 424 No. 2

Written Answers. - Economic and Social Cohesion.

Edward Nealon

Question:

106 Mr. Nealon asked the Minister for Finance if, in the agreement on the European Economic Area signed by the EC and the seven EFTA countries, there is provision for the establishment of a financial mechanism with a view to the reduction of economic and social dis-parties between the regions; the countries in the EC which will receive financial assistance under such a financial mechanism; the amount of money, if any, which is likely to become available to Ireland from this financial mechanism; when such money is likely to become available; the criteria for the allocation of such money; the priorities, if any, which will be given to the west and northwest of Ireland because of their particular difficulties at the periphery of the EC and of the enlarged European Economic Area.

Minister for Finance (Mr. B. Ahern)

The European Economic Area Agreement (EEA) between the EC and EFTA was signed on 2 May 1992. The agreement, once it has been ratified by each of the 19 States involved, will result in the creation, on 1 January 1993, of the largest single unified market in the world, consisting of 380 million consumers and accounting for 43 per cent of the world's trade.

The EEA Agreement makes specific provision for a financial mechanism to promote economic and social cohesion. A Cohesion Fund is to be set up to promote development and structural adjustment in the Island of Ireland, Greece, Portugal and the Objective I Regions of Spain. Financial aid will be provided in the form of direct grants and in the form of interest rebates on loans.

The total amount of grants provided will be ECU 500 million to be committed over the period 1993 to 1997. The total amount of loans which will be eligible for interest rebates will be ECU 1.5 billion. Priority will be given to projects which place particular emphasis on the environment on transport including infrastructure, education and training. Among projects submitted by private undertaking, special consideration will be given to small and medium sized enterprises. The shareout of financial assistance between the eligible countries has not yet been decided.

The EFTA financial mechanism will be administered by the European Investment Bank. The administrative arrangements for implementation of this mechanism have not yet been discussed at Community level.