Dáil Éireann debate -
Thursday, 5 Oct 2023

Vol. 1043 No. 4

Finance (State Guarantees, International Financial Institution Funds and Miscellaneous Provisions) Bill 2023: Second Stage

Minister of State at the Department of Finance (Deputy Jennifer Carroll MacNeill)

I move: "That the Bill be now read a Second Time."

I welcome the opportunity to address Dáil Éireann on this Bill, which was published on Monday, 18 September 2023. It is important to remind ourselves that Ireland is entirely supportive of the European Union and its financial institutions playing an important role in the resilience and recovery of Ukraine in line with successive European Council conclusions. In order to follow through with this stance, Ireland is seeking to contribute to instruments of financial support through the European Union and international financial institutions that are working to ensure the resilience and, when the time comes, the reconstruction of Ukraine in light of the illegal and aggressive Russian invasion.

The Bill is intended to facilitate participation by the State in these efforts to help Ukraine, by facilitating participation in certain donor or trust funds established by certain European-based international financial institutions. The Bill also provides for Oireachtas approval to enter into guarantee and contribution agreements associated with European financial assistance to Ukraine, while providing a basis for any payments required to meet commitments under the agreement from the Central Fund, and to make provision for reporting to Dáil Eireann to facilitate parliamentary oversight of the operation of the guarantee and contribution agreements.

Under its miscellaneous provisions, the Bill seeks to amend section 38(1) of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 in order to require those engaging in correspondent banking relationships to conduct enhanced due diligence when the respondent is within the EU and not just when outside, as is currently the case.

Before I detail the relevant sections, it is worth noting the policy context behind this important and timely Bill. Since the outbreak of war in Ukraine resulting from Russia’s illegal invasion in February of last year, the European Commission has proposed and implemented a number of macro financial assistance, MFA, programmes to help with Ukraine’s immediate financing needs. MFAs are a well-established form of financial aid extended by the EU to countries experiencing a balance of payments crisis, and takes the form of loans or grants or both.

MFA programmes are typically provisioned by the common provisioning fund of the EU budget at a rate of 9% of the value of the loans. However, due to the unusually high level of MFA activity since the invasion of Ukraine, the common provisioning fund in the current EU budget has been virtually depleted. This, coupled with the relatively elevated risk of potential non-repayment of MFA loans by Ukraine, has led the EU to adopt a bespoke approach to the guarantees for the final €6 billion in loans disbursed during the second half of 2022 to that country, whereby the provisioning for the loans is at a higher rate of 70%, split between the common provisioning fund, 9%, and member state guarantees, 61%.

The EU has also proposed to cover the interest rate costs in relation to the 2023 MFA loans to the extent possible by the EU budget and, where the funds available in the budget are insufficient, directly by the member states. In this regard, the relevant EU regulation provides for an interest rate subsidy to be paid by contributions from member states, the terms of which are set out in contribution agreements between the European Union and the member states.

In April 2023, the Government gave its approval for the Minister for Finance, acting on behalf of the State, to enter into guarantee and contribution agreements in relation to EU macro financial assistance operations to Ukraine for the previous and current years, that is, 2022 and 2023, subject to the enactment of this legislation.

The importance of EU macro financial assistance to Ukraine cannot be overstated. It is playing a key role in helping the Ukrainian Government maintain a basic level of state services to its citizens in the most difficult and traumatic of circumstances. It is vital that Ireland participate fully in this initiative, which demonstrates clearly the solidarity of the EU with the people of Ukraine. Ireland recognises the scale of the challenges faced by Ukraine in both the short and long term. Any effect felt by our own economy from the Russian invasion pales in comparison to the humanitarian and economic impact of the war on Ukraine. Sadly, this position continues today.

Ireland supports the EU’s united response to the war in Ukraine, which forms an important part of a strong and consistent global response to a global challenge to democracy and human rights. This support is perhaps best demonstrated by the agreement and implementation of the MFA packages, which have seen €20.7 billion successfully disbursed since the Russian invasion in February 2022, with a further €4.5 billion expected to be disbursed over the remainder of 2023. Our support for Ukraine’s sovereignty and territorial integrity is unwavering.

It is important that this legislation be swiftly enacted so that the State can fulfil its commitments at EU level in relation to financial supports to Ukraine.

Ireland cannot fully participate in the EU’s MFA initiatives for Ukraine for both 2022 and 2023 unless this legislation is enacted. In addition, European international financial institutions, IFIs, have played a key role in supporting Ukraine since the outset of the war in February 2022.

As Deputies will already know, Ireland is a shareholding member of the European Investment Bank, EIB, the European Bank for Reconstruction and Development, EBRD, and the Council of Europe Development Bank, CEB. All three of these institutions play important roles in relation to responding to international events that require a rapid multilateral response. In this regard, they all played their part in responding to the global pandemic and its impact on their respective countries of operation. They are now also responding decisively in line with their mandates to provide financial assistance to Ukraine and countries impacted by the Russian invasion in relation to liquidity to businesses, food security, nuclear safety and the displacement of refugees. This has mostly been done through existing levels of capital in each of the banks. However, to facilitate the additional investment required via direct donations from shareholders and the international community, the banks are using trust and donor funds rather than their existing capital.

It is proposed that this Bill, when enacted, would provide the legal basis to facilitate Ireland’s entry into contribution agreements with the EIB, CEB and EBRD to make contributions to trust and donor funds from the Central Fund. This will facilitate Ireland’s timely participation in international responses by these IFIs to the current crisis in Ukraine and any other future crises without the need to introduce primary legislation each time, as that can lead to time delays. It is important to note that the Bill provides a legislative basis for Ireland to contribute to the response of these three IFIs to an international crisis. As such, it enhances our range of policy interventions in such cases.

I now propose to give an overview of the operation of the Bill, which has 22 sections and is divided into seven parts, as follows. In Part 1, the first two sections are standard legislative sections and provide for the Short Title and citation of the Act, and relevant definitions.

Parts 2, 3 and 4 concern the contributions to IFI trust funds. They enable the State to participate in certain donor or trust funds established by the European Investment Bank, the Council of Europe Development Bank or the European Bank for Reconstruction and Development. These Parts include sections 3 to 11, inclusive.

Part 2 deals with prescribed European Investment Bank contribution agreements. Section 3 specifically provides that the Minister may by order prescribe a contribution agreement between the State and the European Investment Bank that relates to a trust fund established by the EIB. Where amendments are proposed to a prescribed contribution agreement with the EIB, they shall be approved by a resolution of Dáil Éireann and published in Iris Oifigiúil. Payments in respect of a prescribed contribution agreement with the EIB are to be made from the Central Fund and are to not exceed €35 million for a single prescribed EIB contribution agreement or €175 million in respect of all EIB contribution agreements. Reporting requirements are set out and reports are to be laid before Dáil Éireann.

Part 3 deals with the amendment of the European Bank for Reconstruction and Development Act 1991. Section 4 clarifies that “Act of 1991” means the European Bank for Reconstruction and Development Act 1991. Section 5 amends the definition of “the agreement” set out in section 1 of the Act of 1991 to incorporate amendments to the agreement establishing the European Bank for Reconstruction and Development adopted on 30 January 2004 and 30 September 2011 and any further amendments approved by Dáil Éireann.

Section 6 provides that the Minister may by order prescribe a contribution agreement between the State and the European Bank for Reconstruction and Development that relates to a trust fund established by the EBRD where the terms of the contribution agreement have been approved by Dáil Éireann pursuant to Article 29.5.2° of the Constitution. Where amendments are proposed to a prescribed contribution agreement with the EBRD, they will require approval by a resolution of Dáil Éireann pursuant to Article 29.5.2° of the Constitution and be published in Iris Oifigiúil. Payments in respect of a prescribed contribution agreement with the EBRD are to be made from the Central Fund and are to not exceed €10 million for a single prescribed EBRD contribution agreement or €100 million in respect of all prescribed EBRD contribution agreements. Reporting requirements are set out and reports are to be laid before Dáil Éireann.

Section 7 provides that the Schedule to the 1991 Act be substituted with Schedule 1 to this Act, the text of the agreement establishing the European Bank for Reconstruction and Development, as amended. Schedule 1 includes the current wording of the agreement.

Part 4 deals with the amendment of the Council of Europe Development Bank Act 2004. Section 8 clarifies that the "Act of 2004" means the Council of Europe Development Bank Act 2004. Section 9 amends the definition of “the agreement” set out in section 1 of the Act of 2004 to incorporate amendments to the articles of agreement establishing the Council of Europe Development Bank adopted on 26 November 2010 and 25 November 2011 and any further amendments approved by Dáil Éireann.

Section 10 amends the Act of 2004 by inserting a new section 3A that provides that the Minister may by order prescribe a contribution agreement between the State and the Council of Europe Development Bank that relates to a trust fund established by the CEB where the terms of the contribution agreement have been approved by Dáil Éireann pursuant to Article 29.5.2° of the Constitution. Where amendments are proposed to a prescribed contribution agreement with the CEB, they will require approval by a resolution of Dáil Éireann pursuant to Article 29.5.2° of the Constitution and published in Iris Oifigiúil. Payments in respect of a prescribed contribution agreement with the CEB are to be made from the Central Fund and are not to exceed €10 million for a single prescribed CEB contribution agreement or €100 million in respect of all prescribed CEB contribution agreements. Reporting requirements are set out and reports are to be laid before Dáil Éireann.

Section 11 provides that the Schedule to the 2004 Act be substituted with Schedule 2 to this Act, the text of the articles of agreement establishing the Council of Europe Development Bank, as amended. Schedule 2, therefore, includes the current wording of the agreement.

Parts 5 and 6 deal with MFA assistance to Ukraine. They enable the State to participate in the provision of exceptional MFA by the European Union to Ukraine.

Part 5 deals specifically with the guarantee agreement. Section 12 clarifies references to the term “Guarantee Agreement” in Part 3 of the Bill. Section 13 provides that the guarantee agreement may be entered into by the Minister for Finance on behalf of the State. This enables the Minister, acting on behalf of the State, to execute and enter into the Ukraine MFA guarantee agreement and provides the Minister with the powers to meet the State’s obligations under the agreement. The guarantee agreement relates to the second tranche of exceptional MFA to Ukraine which is provisioned by a combination of member state guarantees and the EU budget.

Section 14 provides for the making of payments of up to €76,938,998 out of the Exchequer Central Fund, as may be required to enable the State to fulfil its commitments under the guarantee agreement. This facilitates the payments of contingent liabilities which would arise if Ukraine defaults on loans from the second tranche of exceptional MFA, resulting in member state guarantees being called.

Section 15 provides that any amounts returned to the State under the guarantee agreement will be paid into the Exchequer Central Fund. This clarifies that any moneys refunded to the State under the MFA guarantee agreement are paid into the Central Fund.

Section 16 provides for reporting to Dáil Éireann in relation to payments to and from the Exchequer Central Fund in relation to the guarantee agreement. In the event that a guarantee is called upon, a sum of money will leave the Irish Exchequer. The purpose of this provision is to ensure that there is parliamentary transparency regarding demands on the member state guarantee.

Part 6 deals with the MFA+ contribution agreement. Part 6 clarifies and provides for the entry into the MFA+ contribution agreement by the Minister for Finance on behalf of the State, and for the making of payments out of the Central Fund which may be required to enable the State to fulfil its commitments under the MFA+ contribution agreement.

Section 17 clarifies references to the term “MFA+ Contribution Agreement” in Part 3 of the Bill. Section 18 provides for the entry into the MFA+ contribution agreement by the Minister for Finance on behalf of the State. This enables the Minister, acting on behalf of the State, to execute and enter into the MFA+ contribution agreement and provides the Minister with the powers to meet the State’s obligations under the agreement.

The purpose of the MFA+ regulation is to provide a basis in EU law to enable the Union to provide up to €18 billion to Ukraine in budgetary support in 2023 in the form of concessional loans. As part of the concessional terms of the loans, the EU member states have agreed that the interest costs of the loans will be covered to the extent possible by the EU budget, and where the funds available in the budget are insufficient, directly by the member states. In this regard, the regulation provides for an interest rate subsidy to be paid by member state contributions, the terms of which are set out in the contribution agreement between the European Union and the member states.

Section 19 provides for the making of payments out of the Exchequer Central Fund of up to €63,625,172, which may be required to enable the State to fulfil its commitments under the MFA+ contribution agreement. Section 20 provides that any amounts returned to the State under the MFA+ contribution agreement will be paid into the Exchequer Central Fund.

Section 21 provides for reporting to Dáil Éireann in relation to payments to and from the Exchequer Central Fund in relation to the MFA+ contribution agreement. The Minister shall lay before Dáil Éireann an annual report detailing the amount of funds that have been paid out of the Central Fund for the purpose of the MFA+ contribution agreement during each reporting period and in total from the commencement of this legislation until the end of each reporting period.

Part 7 amends section 38(1) of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 by deleting the words “situated in a place other than a Member State”. The effect of this will be to require those engaged in correspondent banking relationships to conduct enhanced due diligence with respondent institutions within the EU as well as outside of it.

This will address an issue in Ireland's framework for anti-money laundering and countering the financing of terrorism, which was identified by the financial action task force, the global standard setter in this area, of which Ireland is a member.

The Bill is extremely important in the context of how Ireland is seen to respond to the Ukraine crisis, and how Ireland actually responds to the Ukraine crisis, and to any other future crises where EU financial assistance and IFIs play a role. I hope we can move the legislation through both Houses as quickly as possible, having regard to the need for scrutiny. I look forward to Deputies’ contributions on this and future Stages and I hope to respond to them as best I can.

Deputy Pearse Doherty

Cuirim fáilte roimh an Bhille seo agus muid ag déileáil leis ar an Dara Chéim. Seo an Bille Airgeadais (Ráthaíochtaí Stáit, Cistí de chuid Forais Idirnáisiúnta Airgeadais agus Forálacha Ilghnéitheacha), 2023. Mar atá a fhios againn, tá an reachtaíocht seo de dhíth mar gheall ar an slad atá á dhéanamh ar mhuintir na hÚcráine ag lámha na Rúisigh, agus an slad atá déanta ar na daoine, ar na pobail ansin agus ar an infreastruchtúr atá ansin sa taobh sin tíre. Tchíonn muid ar an teilifís an buile trom atá buailte ar an tír sin le tamall fada. Tchíonn muid go raibh ísliú de chuid eacnamaíochta na hÚcráine de 30% in 2022 agus léiríonn seo an slad atá déanta ar an phobal sin le tamall anuas ó lámha na Rúisigh. Deirtear go bhfuil suas le €143 billiún de damáiste déanta ar infreastruchtúr na tíre sin mar gheall ar an chogadh atá ag dul ar aghaidh. Tá seo ó thaobh foirgnimh, tithe, teaghlach, córais infreastruchtúir agus córais taistil de, ó bhóithre go dtí scoileanna. Lena chois sin, tá ospidéil agus a leithéid leagtha go talamh fosta.

Tá an reachtaíocht seo de dhíth lenár bpáirt, ár sciar agus ár dtacaíocht a thabhairt do mhuintir na hÚcráine tríd cuid de na hinfreastruchtúir atá ansin ag an Aontas Eorpach. Cuirim fáilte roimhe sin agus roimh an deis a bheidh againn amach anseo níos mó scrúdú a dhéanamh ar an reachtaíocht seo. Nuair a théann sé os comhair an choiste beimid in ann mionscrúdú a dhéanamh air seo.

As I mentioned, I welcome the opportunity to speak on this legislation. As the Minister of State outlined, this is an important Bill that contains 22 different sections, which she has gone through in some detail. The Bill is important and timely because it is required for us to fully participate in some of the institutional mechanisms available in Europe to support the people, the economy and the infrastructure of Ukraine. The Bill seeks to enable the State to take part in donor and trust funds that have been established by the European Investment Bank and the European Bank for Reconstruction and Development, and for that purpose, to allow the State to enter into contribution agreements related to these funds as prescribed by the Minister. Critically, the legislation also amends the Criminal Justice Act 1984 by requiring those engaged in correspondent banking relationships to conduct enhanced due diligence when the correspondent is within the EU and not just outside the EU, as is currently the case.

As we heard, the Bill also seeks approval from the Oireachtas to enter into the guarantee and contribution agreements connected to European financial assistance to Ukraine. The Minister of State has outlined some of the requirements and potential guarantees that could be called in that. This is something we may tease out later on Committee Stage. This relates to the guarantee agreement provided for in article 10 of decision 2022/1628 made by the European Parliament in 2022 and by the European Council on 20 September 2022, and the contribution agreement provided for in article 7(1) of regulation 2022/2463, made by the European Parliament in 2022 and by the European Council on 14 December 2022.

As we discuss this legislation, let us be mindful of the fact that the State cannot participate fully in the EU’s macro financial assistance initiatives for Ukraine, both for this year and 2022, without the enactment of this legislation. It is on that area that I want to focus my attention because these initiatives have been agreed at European level to support Ukraine and its people and economy following the unjustified Russian invasion of Ukraine. We have seen the human toll of this crisis on our television screens and we have heard it on our radios. It has been tragic and immense. Lives have been lost, families and communities have been torn apart and infrastructure has been destroyed. Russia’s illegal invasion continues to have a devastating economic and social impact on Ukraine. We also hear this in the words of people who have made Ireland their home as they flee the terror of the Russian invasion.

In 2022, the economy in Ukraine contracted by 30%. This statistic masks the real and shocking impact this has had on the livelihood and living standards of the people of Ukraine and on the hopes and dreams of its children. The economic havoc the illegal invasion has exacted on Ukraine will have long-lasting consequences, impacting the aspirations of its children. Large swathes of the country’s infrastructure have been destroyed, public debt has soared and the fiscal deficit has spiralled. It has been estimated that the total amount of direct damage to the country’s infrastructure has exceeded €143 billion. Buildings, family homes, transport and road infrastructure and education and health facilities have all been destroyed at the hands of the Russian aggressor. It is not just in our economic interests, but it is a moral imperative, to support Ukraine and its people, both to weather this storm and to recover from its devastating effects.

For that reason, Sinn Féin will support the legislation and the provisions of same that allow this State to participate fully in the EU's macro financial assistance initiatives for Ukraine and enter into agreements on the guarantees that are sought. We will tease out the 22 sections when we get an opportunity to deal with this on Committee Stage and the party will try to facilitate that as quickly as possible and have detailed scrutiny of what exactly Ireland is potentially on the hook for. I say that in the context of my earlier remarks of the devastation that has been caused. Our support is needed, not just financially but morally, and the legislation is another example of how Ireland is standing with the people of Ukraine and trying to support Ukraine and its future efforts to hopefully rebuild their nation.

Deputy Denis Naughten

I welcome the opportunity to speak on the Bill. It covers three main areas, one of which I want to focus on. I want to focus on the new legislative provision to facilitate entry into a contribution agreement with international financial institutions, also known as multilateral development banks, namely the European Investment Bank, the European Bank for Reconstruction and Development, and the Council of Europe Development Bank, enabling a contribution to a trust or donor fund to be established by them for the purposes of responding to a particular crisis.

I propose that a specific fund should be established under the legislation to address a specific crisis, namely the climate emergency, with specific reference to its impact on migration, which the EU has defined as a crisis. According to the World Bank, the pandemic has pushed an additional 100 million people into extreme poverty. Furthermore, the United Nations Conference on Trade and Development reports that foreign direct investment flows have declined by 35% in developing countries, compared with a reduction of 12% in developed countries.

As the Minister of State knows, the ongoing war in Ukraine continues to cast its shadow, increasing global economic uncertainty and adversely affecting global trade and investment flows.

This disruption caused by the war also helped to push the UN Food and Agriculture Organisation's food price index to its highest level in 2022 since 1961. The slow and halting recovery from the Covid-19 pandemic has run up against the high food and energy prices driven by Russia's war in Ukraine, as well as the escalating impacts of climate change. Alongside the elevated debt servicing levels, local currency devaluation and higher capital costs have disproportionately distressed the low- and middle-income countries' economies while also facing the prospect of a slowing global economy.

These shocks have weakened economic growth and ballooned debt burdens. Urgent action is needed to immediately help low- and middle-income countries to restore debt sustainability and mobilise resources to achieve the shared development and climate change goals that we all aspire to. As I speak, 47 Heads of State and Government from across the European Continent are meeting as part of the European Political Community gathering in Granada, Spain. They are meeting the European Council members who have at the top of their agenda a plan to manage inward migration, which is seen as a major challenge facing the Continent. The main drivers of this migration are either directly or indirectly attributable to both economic and climate challenges. We in Europe will try to build our walls higher and we will try to redistribute inward migration across the Continent for those who manage to scale those walls. The best and most effective way to address this issue is to ensure that people are not forced to leave their homelands in the first place. I have been engaging with young members of parliament from Egypt, Ghana, Indonesia and Senegal who, along with academic experts and climate-focused organisations, are committed to improving the economic and social well-being of the global south and the low- and middle-income countries. They are requesting greater support for the global south and low- and middle-income countries to drive the climate change agenda. Their generation is acutely aware of the pressing challenges posed by climate change. They have grown up witnessing its devastating impacts on communities, ecosystems and their economies. These include extreme weather events, food insecurity, rising sea levels and the displacement of citizens. The climate crisis is not a distant threat but a stark reality that affects each and every one of us.

They represent nations with heavy debt burdens that, as a result, leave them facing a very slow green transition. They are seeking action from the international community and from us, as Europeans, for fair climate financing. The Ubuntu initiative for climate financing is a proposal that these four young parliamentarians have put forward. They chose the name Ubuntu, which is a South African phrase often translated as "I am because you are", to signify the importance of working together as humans in facing the climate change risks we are all trying to address. The initiative has been supported by more than 45 countries from the global south and Ukraine, as one of the low- and middle-income countries. There are three proposals under this initiative. First, debt swaps for climate with a special focus on adaptation. This would have the dual benefit of providing debt relief and spurring climate action. This measure will help to alleviate the burden of debt on low- and middle-income countries. It will allow them to focus on building resilient economies and societies, engage in global trade and contribute to the global climate and sustainability goals.

Second, they propose a common framework for debt relief similar to the G20 common framework for these countries. This framework for debt relief for low-and middle-income countries would help them to deal with the fiscal tightness and protracted liquidity problems they face. It would also ensure that these countries are not burdened with unsustainable debt that could impede their ability to respond to the urgent challenges of climate change. It would also help with economic and social development.

Third, the International Monetary Fund, IMF, surcharges policy must be immediately suspended and eventually eliminated in the upcoming review. These additional charges on top of basic interest rate fees have placed an unfair burden on vulnerable countries in need of financial support. Alleviation of the debt pressures ensures a smooth transition to a green economy.

In light of the global challenges, they are deeply concerned about the impact of Covid-19 and the ongoing war in Ukraine on the economies of low- and middle-income countries they represent. These two shocks have resulted in a sharp decline in economic activity, job losses and inflation, including rising food prices, all of which lead to increased poverty levels. This forces people to migrate, leading to the very issue that the European summit is trying to address, as we speak. As a result, there is a need to provide greater support to the global south and low- and middle-income countries by prioritising these three key points.

We will send representatives to the World Bank and IMF meeting in Marrakesh next week. I ask the Minister of State to ensure that our delegation supports the Ubuntu initiative of these young parliamentarians from across the world to get a fair write-down of debt in conjunction with stimulating their indigenous economies and addressing the climate change challenges they are facing in their countries and across their regions.

The reality is that this debt is stopping innovation and opportunity. It is forcing the best people in those countries to up and leave and come to Europe for a better life. It is compounding the economic stagnation that many of these countries are facing at present. It is leaving these countries with a lack of funding to address the climate challenge that has been caused by us, here in the developed world. Funding has not been forthcoming from all in the developed world to create a new fund in which countries responsible for high carbon emissions would compensate vulnerable countries that have suffered from the climate impacts. However, here is an opportunity for us to come up with an innovative measure of debt forgiveness that would support climate change action and the delivery of the constructive climate change initiatives that we are all talking about. It would support sustainable investment in countries that have been hamstrung up to now because of the levels of debt that they have been trying to manage.

The Ubuntu initiative is coming from communities in these countries. It is coming from the future leaders of our nations, the young parliamentarians in these countries. We are not only supporting the breaking out from the constraints that have been created through debt for various reasons. As we know, some of these reasons have to do with poor governance in these countries which has been facilitated by many of our colleague countries here in the developed world. Many of the regimes here have supported that level of debt creation in some of those countries. On top of that, what we have done in terms of carbon emissions has compounded the climate problems that they are facing. While we are concerned about global stagnation of the economy and the impact it has here on GDP and GNP, it is having a devastating impact on food prices and the viability of many of these economies.

As a result, these countries cannot service the levels of debt that they are being asked to do. On top of that the International Monetary Fund is effectively putting debt penalties on top of interest rates to compound an already difficult problem.

I am asking that we here in Ireland would support the Ubuntu initiative in two ways. We should forcefully support these young parliamentarians when they propose this initiative at that meeting next week. We should also talk with our European colleagues about setting up a fund here in Europe that would help to deal with these challenges and would help to support driving innovative climate-change measures in many of these countries so that people have the opportunity to live and work in their own communities, in their own countries rather than making a perilous journey across the Sahara desert and then making a journey across the Mediterranean which is nothing short of suicidal. We listen to the interviews of these people who are on the shores of the Mediterranean Sea in North Africa and they are very well aware of the risks that they face going across the Mediterranean. They see their neighbours and family members losing their lives on the Mediterranean and yet they are prepared to take that risk because that risk is better than the lack of any future that they have at the moment.

We control that future within our hands. We have the opportunity to drive innovative change by taking a more flexible approach to the management of debt. We are not talking about writing off the debt; we are talking about seeing that debt being adapted in a different way so that instead of paying off loans investment would be put into the economies of these countries to drive sustainable development and drive the green economy in these countries, meeting our global targets on climate change and sustainability as well as addressing the issue of migration, the issue that the leaders all over Europe are looking at at the moment. I ask the Minister of State to work with her European colleagues to support this initiative. Let all of us together collectively make a real difference on a global level to the issue of climate change.

Deputy Cormac Devlin

I welcome the opportunity to examine the Finance (State Guarantees, International Financial Institution Funds, and Miscellaneous Provisions) Bill 2023. Since Russia’s illegal invasion and brutal war on Ukraine escalated in February 2022, having begun in 2014, the international community has come together in solidarity to support the people of Ukraine. This legislation will formalise Ireland’s full participation in important multinational supports to Ukraine.

I visited Ukraine in August 2022 as part of a delegation of parliamentarians from across Europe. I witnessed the devastation and human suffering wrought on Kiev and other cities by Russia. Homes, schools, crèches, businesses and industries were all targeted and destroyed during the Russian invasion. We have seen recently Russian elites arguing for an acceleration of this policy of destruction with the aim of destroying the people of Ukraine and turning the country into a wasteland. Europe and the international community cannot allow this to stand and must continue to support the people of Ukraine as they resist Russian aggression.

Equally, we must support other victims of Russian aggression. Russia has attempted to weaponise energy, people and food. We see its efforts to destabilise parts of the Middle East, Asia and Africa by interrupting food supplies and creating instability via their private military contractors, such as the notorious Wagner Group. These policies are intended to destabilise states and result in the movement of people as they flee the chaos, violence and economic instability.

Closer to home we have seen the impact of Russian policy in our energy prices, migration challenges and its meddling in Western democracies. This Bill is an important step in Ireland’s contribution to supporting international efforts to combat Russia’s aggression and to support and rebuild Ukraine. The cost of the damage caused by Russia's invasion of Ukraine is estimated to be almost €150 billion.

As mentioned, the importance of EU MFA to Ukraine cannot be overstated. It is playing a key role in helping the Ukrainian Government to maintain a basic level of state services for the people of Ukraine in the most difficult and traumatic circumstances. It is critical that Ireland participates fully in this initiative, which clearly demonstrates the solidarity of the EU with Ukraine. I welcome the outcome of the recent meeting of European foreign affairs ministers held in Ukraine, attended by the Tánaiste, Deputy Micheál Martin, and their commitment to stand with the people of Ukraine for as long as Russia’s war continues.

I welcome the introduction of this legislation and I hope it will be supported by all Deputies across the House.

Deputy Catherine Connolly

I have the most serious doubts about this legislation notwithstanding the work by the three gentlemen and in the Department. I fundamentally disagree with Sinn Féin's view on it. I deplore that there has been no pre-legislative scrutiny, which at the very least would have teased out some of the issues here; I hope the committee will do that.

In her speech, the Minister of State talked about context. I would like to give some fuller context. Ireland is a neutral country and we should have a voice commenting on the context of what we are doing here today. Some 108.4 million people are now displaced, which means 1.2% of the global population have been forced to leave their homes. Among that number are 32.5 million refugees and some 76% of them come from just six countries. Within that we have done very little.

I will fill out that context and again I appeal to the Minister of State as a woman and a female politician; we give a different perspective or, mar a deirtear i nGaeilge, súil eile. Tá dualgas orainn mar mhná, mar Theachtaí agus, go háirithe, mar Theachtaí Neamhspleácha súil eile a thabhairt nuair atá Bille mar seo faoi chaibidil againn agus muid ag dul i dtreo amháin chun cabhair a thabhairt do mhuintir na hÚcráine. Níl fadhb ar bith agam leis sin. Tá gá tacaíochta daonna a thabhairt do mhuintir na hÚcráine ach, nuair a deirim é sin, cad mar gheall ar na tíortha eile? Cad mar gheall ar an gcomhthéacs?

To bring it into even more perspective, on 30 September the rescue group Sea-Watch International condemned the European Union migration polity. It recorded a video on board the Sea-Watch twin engine Seabird, showing the Libyan coast guard ramming a boat full of people seeking safety. It commented, "What we saw yesterday is the brutal and daily disgusting migration policy of the European Union." I agree with that comment. Shortly before the boat was hit a large patrol boat was seen throwing lifejackets into the water. All of this has been confirmed. In 2015 we did a deal with Libya, giving it financial support and one of its ships is ramming a boat in the Mediterranean.

Tá ár mbuíochas tuillte ag an iriseoir Sally Hayden. Tá obair na gcapall déanta aici ó thaobh na n-ábhar seo agus í ag cur síos ar an líon daoine atá caillte sa Mheánmhuir. On 3 October, Sally Hayden wrote, "Mourners gathered in Lampedusa on Tuesday to mark the 10th anniversary of a devastating shipwreck, when at least 368 people died off the coast of Italy, leading to outcry [and rightly so] ... Eight days after the first disaster, at least 268 more people drowned in a second incident."

She points out that since 2014, these figures have been confirmed by various organisations on the ground, the figure comes to 28,100 people. I will repeat that even though I hate repetition, 28,100 people have died or gone missing while trying to cross the Mediterranean Sea to reach Europe. This year is shaping up to be the deadliest in the Mediterranean Sea since 2017 when there were 2,357 deaths or disappearances, including children. Year after year, people who are desperately trying to have a better life, leave places where they are starving, suffering from climate change or its consequences, war and conflict, as outlined by Deputy Naughten, most of it perpetuated by the powers that be such as America, Europe, England and France. In light of this, in June this year more than 600 people are thought to have drowned in a single disaster. That is 600 people just gone in a single disaster off Pylos in Greece. I am on record as saying I do not think I can ever swim in the Mediterranean again, as a woman, a mother and a Deputy who has stood by and watched this happen in our name, a neutral country. I could not but agree with Sally Hayden and with the UN High Commissioner for Refugees who has stated:

Rarely does a week pass without stories from across the globe of tragedies and dramatic incidents, whether at sea or on land routes. They have become appallingly normalized.

That is from a joint statement from the UN High Commissioner for Refugees. The statement continues:

These tragedies are preventable and the need to provide a meaningful response cannot be put off any longer. Saving lives is not an option. It is a legal obligation. It is a moral imperative.

That is why the Minister of State is bringing in legislation to save lives in the Ukraine. I understand that. However, when it is put into context, that context needs to be looked at as there are 104 million displaced people because of the wars and many other reasons, which are perpetuated or are the consequences of the policies of governments.

Europe has gone on a route of building a fortress Europe. I remember the recent comments of Josep Borrell that the Europe Union is a garden and outside is a jungle. Building walls, he said, is not great because the jungle will go over the walls. He stood over those comments.

I will come to the legislation but it is important to give context, as the Minister of State did in relation to the war in Ukraine. We spoke recently about the EU military assistance mission, EUMAM, to Ukraine. I got lost in the amount of money that we have now given as a neutral country, for military purposes. The initial target was to train 15,000 Ukrainian soldiers. That was exceeded by April 2023 and it expanded to 30,000 soldiers. As of the end of August 2023, more than 25,000 soldiers have been trained. Mr. Borrell comes to mind again with the new target to train 40,000 by the end of this year. It goes on to look at the common cost of €106.7 million for two years. That is now going to be extended. Ireland expects to pay €2.45 million from the Defence Vote to EUMAM Ukraine over the next 24 years and so on. I despair at reading these figures. We have twisted language to make it nonsensical. We talk about a European Peace Facility which is anything but. If you ask me, it is a warmongering facility. As of August 2023, the total EU contribution for the Ukraine alone was €5.6 billion. When the European Peace Facility was set up for the period 2021 to 2027, the budget was €5 billion. We have far exceeded it. Josep Borrell, that wonderful man, full of vision for a peaceful society, in July 2023 made a proposal to provide €5 billion to Ukraine per year for the next four years. That is €20 billion under a European Peace Facility.

Then there is the factsheet from Europe, which I will not go into. The amount of money going into Ukraine for military purposes is astounding. The war in Ukraine is unacceptable. What Russia has done is illegal and wrong. Our role should be to absolutely call for a peaceful settlement to that war, not joining the warmongers. If we have learned anything in Ireland from our history of conflict we have learned that we have to sit down at some stage. In that context here today now we are looking at a Finance (State Guarantees, International Financial Institution Funds and Miscellaneous Provisions) Bill 2023. There is no pre-legislative scrutiny. There are seven parts and 22 sections. I look at that with my non-financial mind and I read it and then I read it a second time and I see that we are going to make contributions of money to three institutions, or possibly more, but three are listed. We are going to guarantee it. We are going to enter into agreements with the Commission in relation to the agreements and the guarantee. It goes something like this, in my straightforward mind: money will be borrowed on the markets; the three institutions will hold the money; we will make contributions to that as well; loans will be given to the people in Ukraine for reconstruction purposes, presumably, we do not know that either. There is a deal done on the interest. Ireland as a state with other European states will pay the interest on that because it is really important that institutions make profit when we borrow money. That is absolutely vital in the market state. Then we give a guarantee that if Ukraine is not in a position to pay back the money, we give a guarantee. That is my straightforward understanding of this. Something in me says “Mother of Jesus, what are we doing here? What is the risk assessment at its most basic? Nobody, including the Minister of State, has told me what the risk assessment is in relation to what we are signing up to in this matter and the money that we are going to guarantee. I have read, and as always I thank those responsible for the digest for their clear, or as clear as they could do, outline of what this legislation is about, as well as the briefing note we received. I see the figures mentioned and I see that we are capped for the 2022 MFA package, where Ireland's maximum liability is capped in the schedule to the guarantee at €76.9 million. For 2023, we are told there is now a new way of looking at this. It is designed differently and is focused on interest subsidies rather than a member state guarantee. The maximum contribution over the cycle, so we are not talking about 2021, 2022, 2023, we are talking about 2021 up to 2027. That is capped at €63.625 million. In all of this I see us gearing up for a long war. I see us gearing up in anticipation that this war is not going to stop. We have left the human beings out of this completely and we are talking in terms of figures and profits for the institutions.

Deputy Jennifer Carroll MacNeill

We are not talking in terms of figures and profits.

Deputy Catherine Connolly

The money has to be borrowed somewhere as well as the contributions that we are making, as I understand it. If I fail to understand this, the Minister of State can imagine how difficult it is for me to explain it to the ordinary person on the ground, and I have taken the trouble of reading it. Perhaps if we had pre-legislative scrutiny all of this could have been teased out. I do my best to earn the money that I earn and I read all of this material to try to understand it. What we are doing here is retrospectively legalising something. Again, if I am wrong and the Minister of State has a particular background in this better than mine, she might be able to confirm that I am wrong, but retrospectively we are giving a legal basis to what has already been done. I know there is a decision and a regulation from Europe and regulations become immediately enforceable. Have we given money already on a non-legal basis?

Now, retrospectively, we are legalising it, although we are changing the rules from 2023 onwards to do something differently. Yet, lately, when we spoke about a windfall tax, retrospection was allowed only for a short period of three months, or six months maximum. The financial experts told us we could not have retrospection as far back as when prices were at their peak. Does the Minister of State remember that?

Deputy Jennifer Carroll MacNeill

Yes.

Deputy Catherine Connolly

That was when people were stretched beyond belief. Our legislation could not be retrospective then but it can be in this case, without any problem whatsoever. This is the same Europe and these are the same rules but we can now go back.

I am seriously concerned about what we are doing here. I am concerned about the narrative and the continuation of a war without Ireland using its neutral voice. We should use it in a most positive way to say, “Please do not continue this war in our name”. At the same time, we are completely ignoring the approximately 108 million displaced people throughout the world.

In the past decade and prior to the war in Ukraine, the global refugee crisis doubled in scope. As I said, 76% of the refugees came from six countries, which are listed. I will zone in on these countries. Sudan, one of the poorest countries in the world, is taking in an extraordinary number of refugees. The same applies to South Sudan. Then there is Afghanistan, the country, let us remember, that we just deserted. We did not bring in any donor funds. We did not get the three institutions to talk about setting up donor or trust funds to deal with Afghanistan. Let us remember that country and what has happened to women there. They have no schooling or anything else. The ongoing humanitarian crisis in Afghanistan consistently makes it one of the top countries of origin for refugees. Roughly one in ten refugees, 2.8 million people, are Afghan by birth. Most of them are hosted in neighbouring Pakistan and Iran, two countries we like to condemn. Syria, similarly, has millions of displaced people.

What point am I making with this? I have no difficulty with helping the people in Ukraine who are suffering from an illegal invasion. That is humanitarian assistance. Warning signs go off in my head, however, when I see something like this where the narrative and context are given without providing the bigger context of what is happening in the world. Where is our voice as a neutral country? I would like to hear that.

Deputy Jennifer Carroll MacNeill

Yes, that is fine. No problem.

Deputy Catherine Connolly

It should have been done during pre-legislative scrutiny. When we are giving guarantees to institutions in the event that the people of Ukraine and their institutions are unable to pay back the money, the very least we need is a risk assessment of that. That should be before us today.

As Deputy Naughten said, there is a possibility of using this type of mechanism for the greater good, in areas such as climate change and for Afghanistan, as I mentioned, and Palestine and what is happening there. A fund was never set up for Palestine. In fact, we allowed three of the ten organisations we fund to be proscribed as terrorist organisations by Israel. We give money to three organisations which, according to Israel, are terrorist organisations. A report by Amnesty International told us that the operation in Israel was an apartheid operation. We have done nothing about that.

The Minister of State can, therefore, see my cynicism as I stand here as an Independent Deputy. I see a narrative in which the language used draws on all the majestic power of the State. We are left to struggle with that and make sense of it. We are saying that it is good and we need to help these people but why are we not helping other people? Why are we going into a narrative in order to be one of the big boys in Europe? We are one of the tiniest countries in Europe. Our power does not lie in providing military aid or supporting the war. In fact, we are prevented from participating in wars by Article 28.3 of the Constitution.

This Bill will proceed to Committee Stage. I cannot support it as it stands. I will keep an open mind as it is teased out but at the moment, I have the most serious concerns about it. It is being done in our name and in a manner that makes people feel bad because we are not supporting the people of Ukraine. My heart and soul and everything else I have goes out to help the people of Ukraine, but in context.

Given what I have outlined as regards displaced people, I deplore the fact that we have created a two-tier system for refugees in Ireland. We treat one group from a particular country in one way, while we treat another group of asylum seekers in a completely different way. We have been keeping them in direct provision, which was supposed to be a temporary measure, for 23 years. Those are the reasons I have the most serious questions about this Bill.

Debate adjourned.