Tuesday, 2 July 2013

Questions (203)

Dara Calleary


203. Deputy Dara Calleary asked the Minister for Finance the way the European Investment Bank investment can be maximised to support jobs and assist reaching the targets for employment growth; and if he will make a statement on the matter. [24427/13]

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Written answers (Question to Finance)

Since Mr. Werner Hoyer’s appointment as President of the EIB in 2012, there has been a deepening and widening of engagement between Ireland and the Bank. A joint High Level Working Group, HLWG, was established to identify concrete and flexible mechanisms to enhance the Bank’s support for Ireland’s growth agenda. The EIB and Ireland are strongly committed to working together to enhance the Bank’s activity in the country and this commitment is beginning to bear results. EIB group activity in Ireland in 2012 was almost €600 million, representing an increase of over €100 million in 2012 over 2011 levels and covering a diversified range of sectors and transactions. Funding in 2013 is on track to improve upon on 2012 levels. Financing for SMEs is a key part of reaching targets for employment growth, SMEs are vital to Ireland in terms of job creation and boosting economic growth. To put this in context SMEs make up 99% of Irish businesses and account for almost 70% of employment in the State. A number of Government Departments including the Department of Jobs, Enterprise and Innovation are working closely together to ensure that Ireland secures as much funding for our SMEs as possible.

There have been positive results in this regard as evidenced with the recent announcement of the EIB of the provision of €200 million for investment in AIB for small and medium companies across Ireland. This represents the latest EIB support for SMEs in Ireland since an earlier lending programme intermediated by AIB in 2011. As part of the Management Committee visit to Ireland in April, the EIB delegation met with myself and a number of other Government Ministers including Deputy Bruton, where it was highlighted that access to funding for Irish SMEs is a priority for Ireland.

The Deputy may be aware that earlier this month, my colleague, the Minister for Education and Skills signed a €100 million loan agreement with the European Investment Bank, EIB, to further support the Government’s investment in school buildings. SMEs are likely to have significant involvement in these building projects. Most recently, the European Council welcomed a report last week, which the European Commission and the EIB had prepared on the financing of the economy. At that meeting, the European Council agreed on a number of measures and welcomed the intention of the Commission and the EIB to implement them as a matter of priority and to present a comprehensive report on their implementation ahead of its October 2013 meeting, with quantitative objectives, instruments and a timetable. The following measures were agreed:

- To step up efforts by the EIB to support lending to the economy by making full use of the recent increase of EUR 10 billion in its capital. The European Council called on the EIB to implement its plan to increase its lending activity in the EU by at least 40% over 2013-2015. To this effect, the EIB has already identified new lending opportunities of more than EUR 150 billion across a set of critical priorities such as innovation and skills, SME access to finance, resources efficiency and strategic infrastructures;

- To expand joint risk-sharing financial instruments between the European Commission and the EIB to leverage private sector and capital markets investments in SMEs. These initiatives should ensure that the volume of new loans to SMEs across the EU is expanded, respecting the principles of financial soundness and transparency as well as the MFF ceilings. The Council, in consultation with the Commission and the EIB, will specify without delay the parameters for the design of such instruments co-financed by the Structural Funds, aiming at high leverage effects. The necessary preparations should be made to allow these instruments to begin operating in January 2014;

- To increase the European Investment Fund's credit enhancement capacity;

- To gradually expand of the EIB's trade finance schemes to favour SME business across the Union, especially in programme countries;

- To strengthen the cooperation between national development banks and the EIB to increase opportunities for co-lending and exchanges of best practices;

- To develop alternative sources of financing in close cooperation with Member States.