Wednesday, 23 October 2013

Questions (90)

Pearse Doherty

Question:

90. Deputy Pearse Doherty asked the Minister for Finance if he will provide details of the trade finance initiative currently being discussed with the European Investment Bank. [45293/13]

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Written answers (Question to Finance)

As was highlighted in the Action Plan for Jobs 2013, accessing working capital to avail of increased export opportunities through the provision of a broader suite of financial products is an issue for growing Irish enterprises. For this reason one of the SME State Bodies Group's policy commitments under this plan was to review the availability of appropriate finance for international trade. In July the Board of Directors of the European Investment Bank, (EIB) approved a proposal to develop trade facilitation initiatives across Europe premised on the phased roll out of trade finance activities for SMEs and mid-caps. The EIB are beginning with countries such as Greece, Portugal and Ireland where funds may not be available from other sources on reasonable terms. The EIB have already helped Greece in this area and are now turning their focus to Ireland.

The EIB can lend money to Irish SMEs and exporters, usually through an intermediary such as a bank, at a lower cost than is currently accessible without their help. These favourable lending conditions provide an essential support to offset price differences in credit across European countries. This is particularly important for our exporting companies who have to compete with other companies who have access to cheaper credit and lower operating costs.

Since the Budget day announcement, my officials along with officials in the Department of Jobs, Enterprise and Innovation and with Enterprise Ireland have already met with the EIB on this subject. Working papers on the proposal have also been exchanged and the EIB are examining the feasibility of its support for such an initiative in an Irish context. The engagement with the EIB builds on the strong relationship that my Department has sought to build with the bank in seeking to identify and develop sustainable mechanisms to facilitate the provision of financing to SMEs.

The overall goal of this work is to address the specific challenges of funding international trade through a broader suite of financial products and leverage EIB funding to provide much needed finance to exporters and ensure that they have sufficient working capital to grow their exports. This will ultimately restore confidence, support trade and foster growth and employment. Working with the EIB to develop a tailored and customised trade finance initiative would support the growth of the SME sector in Ireland.

I can assure the Deputy that this is being given the highest priority by the relevant officials and I can update the House as progress is being made at each step in the process.