Financial Provisions (Covid-19) Bill 2020: Second Stage (Resumed)

Question again proposed: "That the Bill be now read a Second Time."

It was obvious from the beginning that this global pandemic that a European response was required to meet the unprecedented challenges relating to Covid-19. We therefore welcome this Bill. The support to mitigate unemployment risks in an emergency, SURE, instrument within this Bill provides for €100 billion to be raised on the capital markets by the EU Commission. This will enable member states to temporarily mitigate unemployment risks and it will help us to finance our wage subsidy scheme. It is vitally important that the scheme continues while businesses struggle to operate to full capacity.

Keeping people in employment during this time of uncertainty must be a priority. This was the approach taken in several other European countries. The benefits of a short-term work scheme were seen in Germany during the recent recession. The temporary wage subsidy scheme has been vital in keeping people in work and keeping working relationships intact. The European Investment Bank, EIB, pan-European guarantee fund will provide additional loans to SMEs, mid-caps and corporates affected by Covid-19, but the loans must be interest-free. We must ensure that the money gets to where it is needed most as quickly as possible. Businesses need cash and they need it now.

I welcome the steps that have been taken to date but I am concerned that too many businesses and self-employed people are falling through the gaps. These gaps are becoming more evident as we push through the challenges we continue to face. Small businesses in Mayo continue to close on a daily basis, and we must stop this. Many of these businesses could remain open with proper supports. Grant aid, not loans, is necessary to keep these businesses open until such time as they are able to operate again to their full potential. We bailed out the banks, now we need a bailout for these businesses which have served us so loyally over generations. We need to realise that enabling businesses to stay open, employ people and keep our towns and villages alive makes economic and social sense. It has to be the only show in town. Boarded-up shop fronts, long queues for unemployment benefit and reduced returns for the Exchequer must be avoided at all costs.

Too often in the past, EU administered loans have disproportionately gone to larger companies. Even in the context of the fund under discussion, companies with as many as 3,000 employees can access the loans. Of these loans, 65% will be ring-fenced for SMEs but the category relating to SMEs is broad. Some such enterprises have 250 employees. We have also seen how larger companies are better placed to avail of these funds. They can afford the accountants and financial expertise to draw down large portions of funding available, while smaller businesses and those with only three, five or ten employees do not have the means to do so. I ask that the scheme be strictly monitored in order to ensure that the funds get to where they are needed most and that financial institutions do not capitalise on the backs of struggling businesses. I ask that we do not, as often happens, rely on the sketchy judgment of audit companies that fail to protect our best interests. What measures are being put in place to conduct real-time monitoring of the progress of this scheme so we get the proper outcomes? Can we ensure that companies which benefit from this scheme operate in an ethical manner? It is important to support SMEs of all sizes but we must also recognise the needs of different businesses. SMEs need grant support. This is particularly true of small businesses.

While there are positive elements here, we cannot let them distract from what is really needed, namely, an SME grant scheme that will keep shops in Belmullet, Castlebar and all the other towns across the country open. I am concerned that the necessary finance to keep these businesses open keeps moving out of reach. While businesses hear of there being millions and billions available, they are often told that what is on offer is just not suitable for them. That is why we must aim to fill in these gaps. One business owner described it to me as being like swimming in the deep end of a swimming pool and trying to reach out and grab an edge that keeps moving. We need to get cash into these businesses and we need to do that now, not in a few weeks time or a few months. This Bill allows for that to happen and it is up to us to make it happen in a speedy manner.

Everyone must welcome this legislation and what it intends to do, namely, give a boost to the business sector, which must recover in order to make our economy self-sufficient. Other Members have noted that it comes at an awkward time for businesses that barely got out of a recession which hit them and the country very hard. It is tough luck that the coronavirus came upon us at a time when we were recovering. We had no control of that whatever, and still have very little control over it. The virus continues to rage across the globe and remains a serious threat.

The European Union has come in at an early stage. The German Chancellor has outlined what she believes to be necessary to deal with the issues before us. She is correct that a semi-mutualisation of the debt that has befallen European countries is the obvious thing to do because those countries did not bring what is happening upon themselves.

This did not happen due to mismanagement and it could not have been bargained for. The only thing individual Governments can do in this particular situation is to put in place the necessary health checks to contain the virus and to bring about a situation where it is suppressed to the extent that business can recover and survive.

In every respect, we do not know the full extent of the impact as yet. This Bill is an appropriate reassurance and stabilising measure that will be of benefit to the business sector. Confidence is necessary. Confidence and access to credit are crucial elements in the business sector. Without them, the business sector will wander. What is most important in the context of this particular development is that all countries across the European Union are likely to be treated in the same fashion. That is positive. It is important from the point of view of smaller countries like Ireland that we can expect equal and fair treatment from our neighbours and that they too can expect to receive favourable treatment and support through the various mechanisms that are being made available by individual member states. It is important that we grasp this opportunity. There has been much said about the need for greater emphasis on grants and less emphasis on loans but if the loans are provided at appropriate interest rates they will be of huge benefit in any event, particularly for those companies that want to plan for the future. Access to a particular source of capital, be it by way of grant or loan, provides reassurance and the confidence that is required.

This country came through a huge trauma in the course of the recovery from the economic crash. Without going over that in any great deal, we were bruised after it. The business community was bruised after it. While we made a relatively dramatic recovery in comparison with other countries across the European Union we are still bruised. There are small businesses throughout the length and breadth of this country that are seeking further borrowings and a restructuring of their loan facilities in order that they can recover from it. It is to the eternal credit of the business sector in this country that it has done so well. Businesses worked hard in the face of unbelievable obstacles to bring about a resolution for the restoration of their economy. The agri-food sector in particular bore a heavy burden and did extremely well.

It is no harm to remember that because of the considerable impact of the economic downturn, it naturally follows that we become punch-drunk and that our people are under pressure for considerable periods and as a result they suffer. The most important issue now is access to credit. Credit is important to the running of any business. A business cannot operate unless it has access to credit and can wash its face in terms of the resources it has available. The manner in which it can do that is best dealt with by the people who are experts in the business area, namely, the small and medium sized businesses the length and breadth of this country who, as we speak, continue to endeavour to the best of their ability to put in place the necessary measures to propel them into the future and a safe environment.

My final point is in regard to the future. We do not know for how long this situation will continue, which is sad. It is impossible to determine that at this stage. Much will be determined by the extent to which the global community gets to grips with the pandemic and puts in place the necessary measures to contain and suppress it. By the same token, the supports proposed in this legislation, which are necessary, may have to be and can be revisited in the future. In this regard the support of our colleagues throughout the European Union is important. Standing together, we stand the best chance of restoring confidence in ourselves, industry and the country while at the same time being able to compete in the wider global markets. We live in an open economy. The global markets are available to us as individual business people throughout the length and breadth of this country but only if we are in a position to access sufficient resources to ensure we can continue to run our businesses. We can do that. It is good that we are in that position at this particular time. I hope that the uptake of the resources being made available is sufficiently high to make a positive impact on our economy and as a result our return to economic independence.

The next contributors are meant to be Deputy Joan Collins, sharing with Deputy Connolly. As the Deputies are not present, I call Deputy Flaherty.

I am sharing time with Deputies Cathal Crowe and O'Callaghan. I am thankful for this opportunity to speak on the Financial Provisions (Covid-19) Bill 2020, specifically its importance and relevance to rural Ireland. We all know and realise that Covid-19 has ripped through the heart of rural Ireland, robbing families of loved ones and imposing a necessary lockdown on rural Ireland that ran contrary to the civic and community spirit that best exemplifies our community. For small businesses, this could not have come at a worse time. They were slowly emerging from the crash and seeing the semblance of some form of recovery but then it was as though they were pulled back through a time portal, which has left them facing into a period of immense uncertainty and, no doubt, worry. There is no doubt that Dublin and the large metropolitan centres will bounce back but for towns and villages such as Longford, Ballymahon and Lanesborough, the future is paved with uncertainty and deep anxiety.

I welcome all of the measures that have been put in place to date to assist small businesses and small and medium-sized enterprises, SMEs. In Longford, the local authority commercial rates team has worked assiduously to roll out the business restart scheme but there are some concerns around the uptake of the scheme. While just over 1,300 businesses from County Longford were deemed eligible for the scheme, as of the start of this week only 450 had applied for it. Under the scheme a business can avail of grants of between €2,000 and €10,000 based on its rates bill from 2019. I would encourage all businesses that have not yet applied to apply for it before the 31 August deadline.

Annually, the shift towards online shopping has been of the order of 6% but this has increased exponentially over the period of the Covid-19 crisis. This will be one of the biggest challenges facing small businesses into the future. The local enterprise offices, LEOs, provide a range of supports to assist businesses in this regard, one of which is the online trading voucher scheme. I spoke recently to Sharon Devlin of Cherche La Femme in Longford town. While her heart is very much on Dublin Street, thanks to the online voucher scheme her shop window is now global. Great credit is due to the LEO teams across the country for their work in this regard.

Next week, the Government will announce the July stimulus initiative. It is critical that there are sufficient incentives and supports within it to assist as many businesses as possible. It is important to note that there are still many businesses that are wavering on the question of reopening. As reopening will be incredibly tough for pubs and restaurants in Dublin and the big cities, one can imagine how difficult a challenge it will be for pubs in rural Ireland. We hope that today there will be clarity on the reopening for pubs but, more importantly, we need guidelines to enable pubs that do not provide food to reopen in comfort and with certainty.

I recently met Tommy Kirwan of the famed Greville Arms Hotel in Granard, which was the home place of the late Kitty Kiernan.

Despite his best efforts and those of his staff, he knows that the road to recovery will be desperately slow. He, like so many others, is pleading for guidance, assistance and support.

In the July stimulus, there needs to be meaningful movement on the VAT rate for the hospitality sector. For many food outlets and bars in rural Ireland, such as those in Killashee, Ennybegs, Aughnacliffe, that may be the deciding factor as to whether they can reopen for business. What is just as important for them and for many small businesses will be the wage subsidy scheme, which needs to be not only retained but also reinforced for a considerable period. Sadly, we have seen the closure of a number of local businesses in Longford, foremost among them the Nine Arches restaurant in Ballymahon. We show solidarity with such businesses and hope to see them return in another guise in the near future.

The July stimulus is just one step on the road to recovery. It will pave the way for budget 2021 later in the year, which will set out our national economic plan. I am greatly heartened by the work that has gone into this as we seek to secure our public finances in a world in which we must live with Covid-19. Doubtless, the future will bring immense challenges for County Longford, which will be at the epicentre of efforts to decarbonise the economy. It is critical that budget 2021 positions the recovery fund to ensure that rural Ireland and counties such as Longford get the maximum opportunity. For Longford specifically, the budget will need not only to build on and copper-fasten the just transition fund, as well as to make good on the €1 million rates deficit facing Longford County Council, but also to put in place a stimulus package that can encourage a range of marquee, enterprise, tourism and hospitality ventures for the county.

I am aware that Longford County Council has recently submitted its largest and most ambitious regeneration proposal to date under the urban regeneration and development fund, URDF, and we will, I hope, have a positive decision on this submission in October. If successful, it will seek to address the Great Water Street, Lower Main Street, Connolly Barracks and Church Street areas of the town. Hopefully, a significant State investment will follow on the back of a successful application. If the necessary supports and investment are subsequently included in budget 2021, I have no doubt it will trigger the private sector investment of which Longford town and county have been starved for more than 12 years.

We are still battling Covid-19. The many who have, sadly, lost their lives should and never will be forgotten. Nevertheless, it is important that we start to look to the future, a future in which we will have to live with the challenges of Covid-19 and in which we, as legislators, will have to ensure that the people and businesses of County Longford and all of rural Ireland are afforded the same opportunities as the rest of the country. If the battle with Covid has taught us one lesson, it is that we leave nobody and no community behind on the road forward.

I welcome the Bill and will fully support it. So far, we have managed the health crisis quite well but the litmus for test for the Government is how it will support SMEs as they try to get back on their feet and as our country negotiates its way through an evolving economic crisis. There are a number of indicators that evidence the extent of the economic crisis we find ourselves in. The total net voted expenditure for the first six months of the year is more than five times greater than it was this time last year. Concurrent with that, our economy has an unemployment rate of 22.5% and there has been a 20% drop in the expected VAT take. All of this indicates how stark the circumstances are. The sector that is most exposed in retail is that of SMEs. I am glad the Government is considering stimulating the economy rather than adopting austerity measures.

The Bill is the product of co-operation and partnership between the EU member states. Ireland's share of the EU's €540 billion support package will be used to prop up our ailing but very important SMEs. As we try to reboot our economy, these businesses will be of great importance. When we pass legislation this week, we will be delivering a crucial adrenaline shot to them. There can be no overestimating the key position held by SMEs. In my home county of Clare, there are 8,700 such companies, most of whom employ fewer than ten people but, collectively, they have major firepower, providing approximately 35,000 jobs in the county.

There are some outlying issues we still need to deal with. I hope that the Cabinet will today give full clarity on the reopening of bars, which need to have certainty as to what lies ahead in the coming days. There are also some in the SME sector that have not, thus far, been properly supported. I can think of a number of bed and breakfast operators in County Clare that find themselves outside the current criteria for certain support schemes. Some of them, due to age profile, have not been able to avail of the Covid-19 payments that so many others have been able to avail of in recent months.

The Bill is very important. There should be full and unequivocal support for it tomorrow when we vote on it. This legislation will give a much-needed adrenaline shot to SMEs.

Déanaim comhghairdeas le mo chara, an tAire Stáit, an Teachta Chambers. Níl aon dabht agam ach go mbeidh sé ag obair go crua agus go dícheallach ina oifig nua ar son leas an phobail sna blianta romhainn. I congratulate my colleague, the Minister of State, Deputy Chambers, on his appointment. I have no doubt that he will be a very effective and competent Minister of State in the years ahead and I wish him well.

We can safely say that when the history of the 21st century is written 100 years from now, the events of 2020 in general, and the particulars of the Covid-19 pandemic, will form a very large part. There are two reasons for this. First, the impact the pandemic has had on people's lives, health and lifestyles has been enormous. We have seen that not only in this country but throughout the world. The second reason, although we are not yet fully aware of it, is the long-term consequences of our response to the pandemic. I am fairly sure, and I regret to say, that there will be very serious repercussions regarding the response of not just Ireland but other countries to the pandemic. These were responses we had to make.

I have spoken previously about the significant impact our response to the pandemic has had on certain vulnerable groups in our society, such as on children and young people, victims of domestic violence and those who have mental health issues or special needs. In designing our response to the pandemic, it is very important that we do not subordinate all other societal needs to the very legitimate need of seeking to ensure that people do not get sick as a result of Covid-19.

The purpose of the legislation we are discussing is to try to deal with one set of consequences of our response to Covid-19, namely, the severe and significant economic consequences of our attempt to curtail the pandemic. In particular, it seeks to resolve and target one of the most dangerous consequences of our response to the pandemic, namely, unemployment in general and youth unemployment in particular. Anyone who has studied past recessions will know that one of the most dangerous consequences of a recession is high youth unemployment. I regret to say that, according to the statistics in Ireland at present, the unemployment rate among 15 to 24 year olds is 45%. That is an extremely unusual and, I hope, very temporary high statistic. It is because of the immediate response to the pandemic through the lockdown and it will reduce in the months ahead.

It is nonetheless very important that we try to ensure that we put in place effective measures in order that we do not allow long-term youth unemployment to obtain in this country. When one considers the impact that long-term unemployment has on a country, one can see the necessity of trying to ensure that it does not happen. A consequence of people being unemployed for lengthy periods is they lose their connection to the labour force. Employers, I regret to say, become dismissive of somebody who has not been in employment for a period of, for example, more than a year.

We must do our best to protect young people in particular from the consequences of long-term youth unemployment. We can learn a great deal from what other countries have done. Germany ,Britain and, earlier this week, France, have announced measures to target unemployment, particularly among young people. I welcome the legislation the Government is introducing. It builds upon decisions that were made by the EU arising from the powers that are vested in it under Article 122 of the treaty on the functioning of that Union. That article is not used frequently but it provides power for the Union to provide financial assistance to member states when there have been exceptional occurrences. Clearly it is the case that the pandemic is an exceptional occurrence and, therefore, we need exceptional action by the Union. As a result, on 19 May, Council Regulation 2020/672 was passed. It established the European instrument known as SURE and provided up to €100 billion that is available for the Union to give to member states to deal with the response to the economic consequences of Covid-19. As set out in the Schedule to the Bill, Ireland has to guarantee a certain amount of the contribution but, in turn, we get the benefit of those moneys, which we will badly need to ensure that we can protect young people in particular from the devastation of long-term unemployment.

We also need to recognise that this recession is unusual. Never before have we had a recession that was deliberately caused by governments. They were right to cause the recession when we look back at what was happening in March 2020. When we saw what was happening in the intensive care units, ICUs, and emergency departments in Spain and Italy, we had no alternative but to ensure that we tried to protect our own ICUs and emergency departments by bringing in the lockdown. It was a very deliberate act by us. We know the consequences, although we did not understand fully the long-term consequences. We knew there would be consequences to the lockdown. Just as we were very deliberate in closing down the economy, now we have to be very deliberate in opening it up again. That requires State intervention. We need to take extraordinary measures to prevent long-term unemployment. The Government may need to take measures beyond this legislation. This beneficial proposal is available under the Article 122 provision but it could be the case that we will have to take further steps such as those taken by the UK and France earlier this week. We need to be radical. If we allow a whole cohort of young people to become long-term unemployed, that will have a significant detrimental impact not just on them but on our society. Our society will not recover from having a young cohort who do not have any secure employment.

People have been affected by the lockdown in many different ways. A group that probably has not been given sufficient attention to date and that has been significantly damaged is people aged under 40. In fairness to them, their economic security and work lives have been put on hold to a certain extent for the purpose of trying to ensure that we protect the health of people who are predominantly more elderly than they are. They did that selflessly and they were prepared to do it. We must recognise that we have a responsibility to them as well to ensure that society protects them. Young people have very insecure economic positions not just in Ireland but around the western world at present. The terms of their employment, whether they have any pension provision in the future, their ability to access secure and affordable accommodation are all uncertainties in the lives of most people under 40. It is unusual that they find themselves in the position where their own economic security is less than what was the case for their parents. That is unusual for this country and the world. The State must recognise that we have a responsibility to repay to those young people the selfless acts they have engaged in. They are the people whose careers have been damaged as a result of the lockdown. We must ensure that we do not allow a large cohort of them to drift into long-term unemployment.

This is a very worthwhile Bill. I commend the Minister of State on steering it through the House. It will be of benefit to the country in trying to protect our society from the impact of long-term unemployment. However, we should not close ourselves off from other options that we made need to take off our own bat without having to rely on the EU to direct us. There is a very strong challenge ahead of us but for the future of the country and for the future of young people, who are our future, we need to ensure that we protect them from the ravages of long-term unemployment.

I thank the Deputy. I call on the Minister of State and join others in congratulating him on his appointment and wishing him well.

I thank my colleagues, Deputies Flaherty, O'Callaghan and Crowe for their contributions this morning. I also thank all the Deputies who took part in this debate yesterday evening. In particular, I acknowledge the broad acceptance across the House of the need for measures that this legislation will facilitate. I would like to respond to a few of the specific points raised by Deputies. We may have the opportunity to follow up on them on Committee and Remaining Stages of the Bill.

Covid-19 is a symmetric shock that has hit all countries through no fault of their own, and one that requires a strong collective response to get our economies back on the path to recovery. I agree with the point Deputy O'Callaghan made about ensuring we have stimulus investment and that we invest in our communities. The stimulus package that is to be announced in the next week, as well as additional lines of funding, will ensure that. Some of the remarks in the debate yesterday referred to a decade ago and the fragmentation in a European context. This is an example of European solidarity where countries have come together to act on a collective basis in the context of this pandemic. That is a welcome development in the EU.

This Bill enables access to two EU pandemic response instruments, SURE and the EIB guarantee fund. The SURE scheme aims to support member states with efforts to protect workers and jobs specifically on short-term working arrangements such as Ireland's temporary wage subsidy scheme. To date, Ireland has spent €1.85 billion supporting workers and employers through the scheme. Under the proposal, the European Commission will borrow up to €100 billion on financial markets to provide loans to member states, allowing them to benefit from the EU's strong credit rating and low borrowing costs. Access to this facility is dependent on market rates and the maturity of loans offered by the Commission. The Government will make a decision at the appropriate time, having considered the advice of the NTMA.

The objective of the EIB guarantee fund is to respond to the economic impact of the Covid-19 pandemic outbreak by ensuring that SMEs, mid-caps, corporates and other eligible entities in the participating member states have sufficient liquidity available to weather this rapidly unfolding crisis. The EIB in managing this fund plans to deploy a broad mix of products, to include counter-guarantees, venture debt, venture capital and private equity through a range of financial intermediaries, including national promotional banks, commercial banks, guarantee societies, special purpose vehicles, leasing companies and any other financial intermediaries authorised to lend. While I note Deputy Boyd Barrett's concern that debt financing cannot go on forever, I am acutely aware of the need to support the SME sector to protect livelihoods. This fund is designed to provide assistance to the sector by supporting lending to high-risk operations that are viable but vulnerable due to the impact of the crisis. The primary focus will be on SMEs but there will also be a focus on public entities providing essential services, particularly in health, research and education sectors, which are also eligible for funding. The requirement of the health service in Ireland in respect of whether direct Exchequer funding or access to the guarantee fund would be the most cost-effective approach can only be considered in the context of overall public sector arrangements.

In response to Deputy Doherty, I wish to make clear that access to funding supported by the EIB guarantee in participating member states will be determined based on need and demand relative to the impact of Covid-19 and the related market situation. The EIB will make available additional financing in the context of the fund in all contributing member states, aiming for a geographic distribution that is proportionate to the economic impact of the crisis, the size of the economies and the available national and European support instruments. Deployment of funding will be subject to fund-specific concentration limits, including that the three member states that receive the most financing should not exceed 50% of the total fund financing. This excludes underlying financing structures that are, by their nature, multi-country, that is, covering two or more member states. The 15 member states that receive the least financing should exceed 10% of the total fund financing. These concentration limits will be reviewed and may be adjusted to reflect the evolving impact of the crisis and market needs in the various member states. Any change in the concentration limit will be subject to approval by the contributors' committee which will include a representative of each of the participating member states. There are no further economic conditions attached to an individual member state's membership of the guarantee fund.

Deputy Doherty and others referred to the need for the EIB guarantee to be aimed primarily at SMEs. This fund is so aimed. One of the specific provisions of the fund is that €130 billion, or 65% of funding, will be allocated to companies with less than 249 employees. The remaining funding will be allocated in the following manner: €46 billion or 23% will be available for companies with 250 employees or more, €10 billion or 5% will be available for public sector companies and entities active in the areas of health or health research or providing essential services related to the health crisis, and €14 billion or 7% will be available for larger companies with up to 2,999 employees.

I note Deputies' concerns regarding funding allocations to large corporations. I wish to assure them that this matter was given thorough consideration during all the negotiations involving member states. It was agreed that greater restrictions will apply on the amount and types of funding that can go to the largest companies, with additional safeguards in place regarding large corporates with more than 3,000 employees. The restrictions are that there will be no equity investments or asset-based securities operations, with support available only for working capital and supply chain finance. Financing will only be available through financial intermediaries with skin in the game and exposure to individual corporates will be limited to €250 million. In order to rule out strategic investment projects that could be interpreted as industrial policy, only loans in full alignment with the temporary state aid regime applicable for national schemes, including regarding short loan maturities, will be considered. Funding will only be available to sectors that are in line with the EIB long-term mission of innovation, the environment and SME support. There will be further involvement of participating member states represented on a contributors' committee on individual transactions, complemented with higher reporting requirements.

Deputies Verona Murphy, Fleming and Michael Collins referred to the difficulties that may be encountered by small and microenterprises in the context of meeting the cost of borrowing. One of the values of guarantee systems is that they reduce the levels of risk for lenders. This, combined with the triple A rating of the EIB, serves to increase the availability and reduce the cost of borrowing to small business. The SBCI will seek access to guaranteed capacity from the guarantee fund in order to continue to provide long-term unsecured lending to the SME market. The SBCI and the Department of Business, Enterprise and Innovation are monitoring the requirement for a working capital support scheme.

In response to the comments of Deputy Shortall regarding austerity, it is clear from the Bill and the programme for Government that the Government is committed to recovery through investment and will draw on all available resources to maximise opportunities and supports for Irish businesses.

Deputies raised concerns about the pace of the legislation. The Bill deals with an extremely urgent matter and we are seeking to expedite its enactment. It is the first legislation to be brought forward by the Department of Finance since the Government was formed. The SURE instrument cannot be accessed by any member state until all member states have signed the guarantee agreement. The Commission needs guarantees from all the member states in order to access the bond markets on the best possible terms. Ireland cannot participate in the EIB pan-European guarantee fund unless the Bill is enacted. A lack of participation would have a direct impact on Irish businesses and public sector bodies as they cannot apply for finance supported by the fund until Ireland has signed a contribution agreement with the EIB.

There is a risk that certain banks may refuse to sign up to loan schemes currently being developed by the SBCI to help SMEs deal with the Covid crisis due to an ambiguity regarding the circumstances in which the insurance Acts and regulations apply to the issuance of guarantees by the SBCI. The amendment in the Bill to the Strategic Banking Corporation of Ireland Act 2014 removes this ambiguity and brings greater certainty in that space.

Deputies queried the potential conditions of the loans and whether they will reflect similar conditions which applied to historic loans. As I stated, this situation is the complete opposite of that referred to by the Deputies. It is a matter of European solidarity. Article 9(2) of the Commission regulations sets a limit of 10% of the maximum amount of borrowings by the Union that can fall due in any one year. This will smooth the repayment profile and ensure that borrowing will be structured to ensure that it is over different maturities. This is an important risk mitigation, ensuring that there cannot be a large calling-in of guarantees and minimising any residual risk to the Union's budget. Nonetheless, the guarantee agreement notes that the full amount of the guarantee is reflected in Ireland's share of this process.

In regard to the amount that Ireland will draw down or whether we will draw it down, the SURE instrument offers a useful access stream to a pool of liquidity that has long-term maturity, which brings certainty for Ireland. However, it depends on the market rate and maturity of the loans offered by the Commission. That will be a matter with the NTMA over the coming period. The recovery strategy instruments announced later are designed to assist hard-hit economies to get back on their feet until after the Covid pandemic has passed.

I thank Deputies across the House for their contributions. I appreciate their input into the Bill. If the Bill is passed this week, it will allow access to a significant stream of funding that will support SMEs and employment and assist in getting our economy back on track as we continue to drive through this crisis.

Question put and agreed to.