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Seanad Éireann debate -
Tuesday, 27 Jan 1976

Vol. 83 No. 8

ACP-EEC Convention of Lomé (Contracts of Guarantee Between State and European Investment Bank) Bill, 1976 (Certified Money Bill): Second and Subsequent Stages.

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

The second aspect of the ACP-EEC Convention of Lomé and its related internal agreements for which specific legislative authority was found to be necessary is the obligation upon the State to enter into contracts of guarantee with the European Investment Bank as provided by article 9 of the internal agreement on the financing and administration of Community aid. Under this article, member states of the Community undertake to act as guarantor for the bank, in proportion to their contributions to its capital, in respect of all financial commitments arising for its borrowers out of the loan contracts concluded by the bank. This guarantee is restricted to 30 per cent of the total credits opened by the bank under the loan contracts.

Ireland's share of the capital of the European Investment Bank is .74 per cent approximately. Under the convention and internal agreement it is proposed that the bank should provide loans amounting to 400 million units of account. As the guarantee by the member states is restricted to 30 per cent of this amount the contracts of guarantee to be concluded by Ireland would be in respect of 0.74 per cent of 120 million units of account, namely 888,000 units of account, or approximately £500,000 at the current value of the unit of account. This is, of course, the cumulative liability in respect of the totality of loans to be made by the bank for the duration of the convention. Under the Bill now before the House, it is provided that any payments to be made on foot of the contracts of guarantee will be made out of the Central Fund. However, as these loans will be made for productive purposes repayment problems are not envisaged. I am advised that no such problems have ever arisen in the case of previous conventions, such as the Yaoundé Convention, which immediately preceded the Lomé Convention.

The ACP-EEC Convention of Lomé (Contracts of Guarantee between State and European Investment Bank) Bill, 1976 is designed to empower the Minister for Finance to fulfil the obligations undertaken by this country under article 9 of the internal agreement. For the reasons I mentioned earlier in relation to the Diplomatic Relations and Immunities (Amendment) Bill, it is desirable that Ireland should be in a position to ratify the Convention of Lomé as soon as possible. I would therefore ask the House to approve the Bill now before it as a matter of priority.

Very briefly, let me say we have no objection whatever to this Bill and, in fact, welcome it as we did the previous Bill as an effort to ensure that we ratify the Lomé Convention as speedily as possible. The criticism I made in regard to the tardiness in producing the first Bill—however that may have been answered and properly answered by the Minister for Foreign Affairs, having regard to the legal technicalities in regard to the whole principle of diplomatic immunity that arose in drafting that Bill —surely does not apply to this Bill. This is a perfectly straightforward Bill which could have been produced within a very short period of ratification. which, as I say, is now nearly 12 months back. It is the type of delay that I am afraid flows from the European Communities legislation that, in my view, was too tightly drawn in this House at the time.

As I recollect it, in 1972 one of the reasons for that was those of us who were very keen on the Bill being passed and keen on Ireland's entry to Europe felt at the time that the tighter we drew the legislation the better from the point of view of convincing our people that we were not handing over any great degree of sovereignty. That was the thinking at the time. I do not think it is relevant to today because the fact of the matter is that we will be signing many more conventions of the Lomé type, many more arrangements or that and other similar types in which, for instance, as under this Bill we will be entering into guarantor commitments as far as the European Investment Bank is concerned. This is going to lead to a plethora of Bills of this kind over the years ahead, and it is unfortunate that we have the legislation in that form. I would suggest to the Minister and the Government that they seriously consider at some future and appropriate date an amendment of the legislation with a view to providing for legislation by order in respect of matters of this kind.

The need for legislative authority for the Minister to sign the guarantee was not clear. Indeed, especially as the Government was bound by the agreement to provide these guarantees in this area, too, there was a legal doubt which had to be cleared up before the need for this legislation emerged. So that a similar problem arose in this instance.

Question put and agreed to.
Agreed to take remaining Stages today.
Bill put through Committee, reported without recommendation, received for final consideration and ordered to be returned to the Dáil.
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