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.