The Western Development Commission Act, 1998, requires that aid provided to enterprises or projects by the commission shall be in such form and subject to such terms and conditions as the commission determines, subject to the consent of the Minister for Agriculture and Food and the Minister for Finance.
The commission, which I established under the Act on 1 February this year, decided at its meeting on 7 April how the western investment fund is to be used, including the forms of aid. Consequently, the terms and conditions to be applied to aid could not be finalised before then. My Department was in consultation with the non-statutory commission on this matter since last November. In accordance with the Act, I recently sought the agreement of the Minister for Finance for a set of terms and conditions to be applied to aid provided from the fund and I expect a decision very soon.
It was not appropriate to hold consultations with the European Commission, prior to the passage of the Act, on the question of aid from the fund being classified as State aid. Given that the fund is Exchequer financed, it would be most likely to be regarded as State aid and, in the circumstances, there would have been little point in pursuing the matter prior to the Western Development Commission taking a definitive decision on the forms of aid to be provided. Now that it has done so, I hope to have clarified this week whether a formal notification to the European Commission is necessary. In that event, the notification will be submitted without delay. It is important to remember that, under the EC Treaty, a member state must not implement its proposed measures until the European Commission has considered them and reached a decision. The Commission can require aid not notified to it to be repaid, even long after the aid has been granted.
In relation to projects seeking aid from the fund, no projects have been shelved by the Western Development Commission. I expect that any projects on hand will be considered fully and adjudicated on once the fund is operational.
The Government has given a commitment that £25 million will be provided for the western investment fund over a six year period from 1998. This commitment will not falter.