Dáil Éireann debate -
Tuesday, 18 May 1999

Vol. 504 No. 7

Written Answers. - Financial Services Sector.

John Dennehy

Question:

196 Mr. Dennehy asked the Minister for Finance if he will commission a report to examine the feasibility of establishing a financial services district in Cork along the lines of the Custom House Quay in Dublin in view of the large number of qualified graduates in the region and the desire for balanced regional development. [12767/99]

Minister for Finance (Mr. McCreevy)

The IFSC regime was originally approved by the European Commission in 1987 as a State aid. However, during 1997-98, the Commission reviewed its position in relation to this approval and, in the light of Ireland's changed socio-economic position, determined that the IFSC regime could no longer be considered compatible with the common market and that measures needed to be taken to eliminate this incompatibility.

In July 1998, agreement was reached with the EU Commission on the phasing out of the preferential IFSC regime, with effect from 1 January 2003. The effect of this agreement is that no new projects may be approved under the IFSC regime after 1999, while the number of new projects which may be approved in 1999 is limited to 67. In the circumstances, since the possibility of introducing any new tax measures targeted at the financial services sector of the economy would be unacceptable to the EU Commission, I do not propose to commission any studies to examine the feasibility of establishing further financial services centres, along the lines of the IFSC.