Written Answers Nos. 22-29
22. Deputy Billy Kelleher asked the Minister for Finance when, in view of the revised arrangements in respect of the promissory notes, he expects to be in a position to update the planned budgetary adjustment in 2014; and if he will make a statement on the matter. [10606/13]
View answer43. Deputy Joan Collins asked the Minister for Finance if, following the recent Irish Bank Resolution Corporation-promissory note deal, it is his intention to pass on the benefit of the claimed €1 billion in savings in the form of a less severe budget adjustment in budget 2014; if so, if he will quantify the amount of any such new adjustment target; and if he will make a statement on the matter. [10631/13]
View answer59. Deputy Richard Boyd Barrett asked the Minister for Finance if, following the recent Irish Bank Resolution Corporation-promissory note deal, it is his intention to pass on the benefit of the claims that €1 billion in savings in the form of a less severe budget adjustment in budget 2014; if so, if he will quantify the amount of any such new adjustment target; and if he will make a statement on the matter. [10630/13]
View answerI propose to take Questions Nos. 22, 43 and 59 together.
As I have stated in recent days, it is important to note that some aspects of the promissory note deal are yet to be finalised. For example, the liquidator is in the process of overseeing a valuation and sales process for the assets of IBRC, while the final payments made under the ELG Scheme have not yet been determined.
Nevertheless, as referred to by the Deputy, simulations ran by my Department estimate that the General Government deficit will improve by approximately €1 billion per annum over the coming years, which will bring us €1 billion closer to attaining our 3% deficit target by 2015. However, this has to be seen in the light of the estimated General Government deficits of €8.9bn and €5.3bn in 2014 and 2015 respectively, as per Budget 2013.
While this agreement is a significant step forward in restoring sustainability to our public finances, this Government is well aware that there remains a considerable gap between what we get in revenue and what we spend. This situation is not sustainable over the longer term. In addition to the requirements to bring our deficit to under 3% of GDP by 2015 as per the EDP, it makes sense that we bring balance back to the public finances and stabilise and reduce our debt burden.
As we are only two months into the year, I will not be drawn into speculation on the composition of the next Budget and the impact that this deal will have on it. There are a lot of other moving parts to be considered such as economic growth, tax take and expenditure performance. All of the above, including the impact of the promissory note deal, will form the basis of Government decisions regarding the Budget.
23. Deputy John Browne asked the Minister for Finance if he has had discussions with the public interest directors in Bank of Ireland in relation to the action that is needed to close the deficit on the company's pension fund; if he will insist that this is done in a way that protects the State's investment in Bank of Ireland; and if he will make a statement on the matter. [10595/13]
View answerI met with the Bank of Ireland Board, including the public interest directors in January 2013 however the topic referred to was not on the agenda. I believe that Bank of Ireland only recently announced their intention to enter into discussions regarding the deficit in its pension scheme and I support the management’s intention to deal with this issue.
Officials from my Department meet with representatives of the bank on a regular basis – including a monthly management meeting and are kept up to date with the banks proposals to progress their discussions to a solution.
24. Deputy Seamus Kirk asked the Minister for Finance the implications for the budgetary process here following the agreement between the EU's Council of Ministers and the European Parliament in respect of the two pack regulations; and if he will make a statement on the matter. [10609/13]
View answerThe Irish Presidency of the Council of the EU has secured agreement, on behalf of euro area member countries, with the European Parliament and the European Commission, on two proposed regulations – the “two-pack”. One of the proposals is on the monitoring and assessment of draft budgetary plans and on ensuring the correction of excessive deficits. The other is on the strengthening of economic and budgetary surveillance and sets out explicit rules for enhanced surveillance of countries experiencing or threatened with financial difficulties. The agreement reached on February 20th will have to be approved by member countries and the European Parliament. The “two-pack” will be a significant and welcome enhancement of the euro area’s economic governance regime. It is, to a great extent, a natural extension of the measures contained in the ‘six-pack’ which was introduced on 13 December, 2011. The ‘six-pack’ - comprising five regulations and one directive - was designed to reform and strengthen fiscal surveillance under the Stability and Growth Pact and to introduce new macroeconomic surveillance.
The ‘two-pack’, which will be applicable to euro area member countries only, has several direct implications for the existing budgetary process. The key ones are: Member States will be required to produce a medium-term fiscal plan by the end of April each year; the draft budget for central government and the main parameters of the draft budgets for all the other sub-sectors of the general government must be published by the 15th of October each year; both the medium-term fiscal plan and the draft budget must be based on independent macroeconomic forecasts which are defined as forecasts produced or endorsed by independent bodies; and the budget for the central government must be adopted or fixed upon and published by the 31st of December each year.
The potential impact of these provisions on the budgetary timeline and the budgetary process are being considered and discussed by my Department and the Department of Public Expenditure and Reform. Other relevant Departments, such as the Department of Environment, Community and Local Government in relation to the local government sub-sector of general government, are also being consulted. When this process is completed in the near future, the Minister for Public Expenditure and I will be bring a Memorandum to Government setting out our proposals to meet the requirements I set out above.
In the context of the Medium-Term Fiscal Plan published in November 2012, reference was made to the two-pack proposals. The key point made in that publication, which still stands, is that much of the existing budgetary process, which normally is completed in the first week of December, will have to be finalised much earlier.
25. Deputy Timmy Dooley asked the Minister for Finance his views that there is a lack of competition in the banking sector here in the context of lending to small and medium enterprises; his further views on the way this can be addressed; and if he will make a statement on the matter. [10602/13]
View answerI am aware of the comments made by the Credit Reviewer in his appearance before the Joint Committee on Finance and Public Expenditure and Reform. I would accept his view that having only three main banks lending to the SME sector is not an ideal situation. The Government has taken a number of actions, particularly where SMEs have been refused credit, to improve the situation in relation to credit availability to SMEs. The Temporary Partial Credit Guarantee scheme addresses the situation where the SME is outside the risk appetite of the banks. This can arise because the SME’s lack of collateral or the banks’ lack of understanding of the business model, the market, the sector or the technology. The three main SME lenders are all participating in the Guarantee scheme.
The Microenterprise Loan Fund Scheme will provide loans of up to €25k to start-up, newly established, or growing microenterprises employing less than 10 people, who have commercially viable proposals that do not meet the conventional risk criteria applied by banks.
The funds, recently announced by the NPRF which will make €850m available for investment in Irish SME sector, should also be of assistance. In addition, the NPRF is also currently reviewing additional SME fund opportunities that would complement these funds, with the objective that the eventual suite of funds would have the capacity to invest across the full spectrum of SME financing needs.
Ultimately, it is the many actions which this Government is taking to normalise the Irish banking sector such as the cessation of the Eligible Liabilities Guarantee Scheme together with the recovery of the economy which will attract new participants to lend in the SME sector.
26. Deputy Jonathan O'Brien asked the Minister for Finance if he considers there is a need for a review of the code of conduct on mortgage arrears. [10582/13]
View answerI have been advised by the Central Bank that they have already publicly committed to reviewing the Code of Conduct on Mortgage Arrears during 2013. This review will include a public consultation period. Details of the arrangements for the consultation will appear shortly on the Central Bank’s website – www.centralbank.ie.
27. Deputy Pádraig Mac Lochlainn asked the Minister for Finance when the programme for Government’s commitment to introduce a two-year cooling-off period for workers leaving the Civil Service to join the private sector will be implemented; and if National Treasury Management Agency staff will be included in any such period. [10585/13]
View answerThe information requested by the Deputy relating to the requirements applying to senior civil servants taking up employment outside of the Civil Service in the circumstances set out in the Deputy’s question, can be found in section 20 the Civil Service Code of Standards and Behaviour which is available at the Standards in Public Office Commission’s website ( www.sipo.ie.). Civil servants who hold positions which are “designated positions” for the purposes of the Ethics Acts are prohibited, within twelve months of resigning or retiring from the service, from accepting an offer of appointment from an employer outside the Civil Service or an engagement in a particular consultancy project, without first obtaining approval, from the Outside Appointments Board in the case of officers at and above Assistant Secretary level or the appropriate Secretary-General/Head of Office otherwise. This would apply where the nature and terms of such appointment or engagement could lead to a conflict of interest.
Applications are considered by the Outside Appointments Board on the basis of determining whether or not a clear conflict of interest exists. The Board can either approve the take-up of an appointment, the acceptance of an engagement, attach conditions or recommend against the appointment. The composition, operation and reporting arrangements for the Board are set out in section 21 of the Code.
Officers must also continue to observe the restrictions imposed by the Official Secrets Act 1963. Departments and Offices are required under the Code to monitor the acceptance of outside appointments by civil servants and former civil servants.
I understand that the Minister for Public Expenditure and Reform has made significant progress in developing proposals for the regulation of lobbying in relation to the commitment included in the Programme for Government referred to in the Deputy’s question. The consultation process undertaken on this commitment was based on the OECD Principles for Transparency and Integrity in lobbying which recommend that it may be necessary to impose a ‘cooling-off’ period that temporarily restricts former public officials from lobbying their past organisations. The proposals in this area - which draw on the Outside Appointments Board model applying to senior civil servants - will be published following consideration by Government as part of the General Scheme of a Regulation of Lobbying Bill.
The relevant OECD principles also highlight the requirement for countries to consider establishing restrictions for public officials leaving office to address other potential conflict of interest situations that could arise. It is planned that these other elements of the Programme for Government commitment which also arise from the recommendations contained in the final report of the Mahon Tribunal will be addressed through the proposed reform of the legislative framework for ethics which is currently underway.
I am informed by the National Treasury Management Agency (NTMA) that its capacity to successfully perform its commercial market-facing functions is critically dependent on its ability to attract employees with specialist skills from the private sector, including at middle and senior management level. In considering this issue it is important not to compromise the NTMA’s ability to attract such employees. Mobility with the private sector is a crucial component of the NTMA business model. Indeed, NTMA staff assigned to NAMA is recruited on the basis of specified purpose contracts which will cease when NAMA no longer requires their particular function.
NTMA employees have notice periods of one or three months and 6 months in the case of the Chief Executive. All NTMA employees are subject to section 14 of the National Treasury Management Agency Act, 1990 which prohibits an employee from disclosing any information obtained while carrying out their duties as employees of the NTMA. NTMA employees are also subject to the Official Secrets Act. Contravention of the NTMA Act and the Official Secrets Act is a criminal offence and the prohibition on disclosing confidential information applies indefinitely and extends to former employees.
I understand the NTMA Chief Executive is currently reviewing NTMA policy in this area.
28. Deputy Niall Collins asked the Minister for Finance his views regarding the competition implications in the life and pensions sector of the sale of Irish Life to Great-West Lifeco; and if he will make a statement on the matter. [10598/13]
View answerI can inform the Deputy that the Competition Directorate of the European Commission will consider this transaction and their approval is required in order to complete the transaction. Without wishing to prejudge the matters under consideration it is my expectation that such approval will be granted and that the transaction will complete. In a more general sense I believe that the financial strength of Great-West Lifeco will be of great benefit to the life insurance and asset management markets in Ireland and will provide great comfort to the policyholders and customers of Irish Life.
29. Deputy Brendan Smith asked the Minister for Finance if EUROSTAT has indicated that it is considering including bonds issued by the National Asset Management Agency in the calculation of Ireland’s general Government debt; and if he will make a statement on the matter. [10622/13]
View answerThe NAMA SPV, National Asset Management Agency Investment Limited (NAMAIL) was established to facilitate the participation of private investors in NAMA. 51 per cent of the shares of NAMAIL are held by three private investors, and as a consequence NAMAIL is classified as outside of government for the calculation of general government debt.
