Edward Nealon
Question:49 Mr. Nealon asked the Minister for Finance if he has satisfied himself with the proportion of European Investment Bank moneys which now go to private industry; and if he will make a statement on the matter.
Written Answers. - European Investment Bank Allocations.
In 1992 the European Investment Bank EIB provided loans totalling 16.9 billion ECU — IR£13.5 billion — within the European Community of which nearly half went to the private sector. This is a sizeable proportion of EIB's lending activities and represents a valuable contribution to the balanced development of the Community as over 70 per cent of it went to the underdeveloped regions.
Since 1973 EIB lending to the Irish private sector has totalled approximately IR£255 million, made up mainly of loans to small and medium-sized enterprises. In recent years, however, the take-up of EIB loans by the Irish private sector has been relatively low at some IR£21.2 million since 1991.
A number of reasons could be put forward for this, such as the availability of competitive alternative domestic sources of finance, EIB's strict financial and security conditions and a reluctance on the part of Irish investors to take on the exchange risk which would be involved in borrowing foreign currencies or to lock into long-term fixed interest loans at times when interest rates were perceived to be high. EIB lending is, of course, available only for long-term, economically viable, capital investment projects.
I would like to point out that EIB does not lend on the basis of geographical or sectoral quotas or proportions. There is no specific proportion of EIB moneys allocated to Ireland. Therefore, Irish borrowers have access to EIB loans on the same terms as those elsewhere in the Community.
It should also be noted that EIB loans are provided on strictly commercial terms and, although they can be very competitive, are not soft loans or subsidised by the bank in any way. The sourcing of finance is ultimately determined by each individual borrower exercising his/her right to obtain the most suitable and competitive loan finance from whatever source is available.
I am constantly seeking to maximise, as far as possible, EIB lending to all sectors in Ireland, both public and private. My Department, in conjunction with the EIB, will continue to examine ways in which the current situation might be improved.