Thursday, 5 July 2012

Questions (55)

Sean Fleming


48 Deputy Sean Fleming asked the Minister for Finance the way Ireland can benefit from the compact for growth as discussed at the recent EU summit; and if he will make a statement on the matter. [32463/12]

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Written answers (Question to Minister for Finance)

Heads of State or Government in the EU decided on a compact for growth and jobs at the European Council on 28th June. This involves action by Member States and at EU level in order to boost growth, investment and employment. Measures to be implemented at national level include the full implementation of the country-specific recommendations from the European Semester as well as pursuing differentiated growth-friendly fiscal consolidation. From an Irish perspective, I want to assure the Deputy that the required consolidation over the next few years will be pursued in as growth-friendly a manner as possible.

A number of measures are to be implemented at EU level in order to boost growth, and I believe the cumulative impact of all of these measures will have a positive impact in terms of supporting economic activity in the EU at this difficult juncture. This, in turn, can be expected to benefit Ireland, given the importance of the EU as a trading partner.

At EU level, the measures announced include a deepening of the Single Market and reducing the regulatory burden. Another important measure is the mobilisation of €120 billion — about 1 per cent of EU gross national income — to boost European growth. Part of this stems from a €10 billion paid-in capital increase for the European Investment Bank, which almost doubles the lending capacity of the Bank. This is of particular interest to Ireland because the Bank has been an important source of funding. Funds have amounted to an average of €500 million per annum covering commercial semi-states, local authorities, road projects (PPPs) and loans to banks for on-lending to SMEs. The Exchequer can also borrow directly from the EIB in respect of capital projects such as school-building.

In this context, I would point out that EIB President Werner Hoyer will be visiting Dublin tomorrow to meet with myself and Minister Howlin in order to discuss how the EIB can work with Ireland to explore the possibility of developing flexible and innovative funding solutions to invest in infrastructure and key sectors of the economy.