Written Answers Nos. 28-42
28. Deputy Dara Calleary asked the Minister for Finance the implications of a transaction the State entered into in 2015 in respect of its holding in Allied Irish Banks on the application of the expenditure rule in 2016 and beyond; and if he will make a statement on the matter. [13027/16]
View answerWhen reporting the Excessive Deficit Returns for 2015 in April, the CSO highlighted that Eurostat had made a determination during the clarification process that the conversion of the AIB preference shares to ordinary shares was to be treated as a capital transfer (expenditure) rather than a reinvestment of capital. This increased the general government expenditure for 2015 on a one-off basis by circa €2.1 billion and worsened the general government deficit for 2015 by about 1% of GDP. Excluding this one-off transaction, the deficit on an underlying basis was 1.3% of GDP.
Compliance with the expenditure benchmark is calculated by comparing the year-on-year change in general government expenditure, excluding certain items such as interest expenditure, and there is no provision for the exclusion of one-off transactions. As a result, the general government expenditure outturn for 2015 does mean that there is a significant buffer now built into the calculation of Ireland's compliance with the expenditure benchmark in 2016.
However, as the Deputy is aware, the expenditure benchmark is only one of the two pillars used to assess compliance with the preventive arm of the Stability and Growth Pact. The second pillar is the balanced budget rule, which requires a Member State to move towards its medium-term budgetary objective or MTO in accordance with its adjustment path. The MTO is set in structural terms, which means it excludes the effects of the economic cycle and one-off transactions, such as the AIB transaction in 2015.
In assessing compliance with the preventive arm of the SGP, the European Commission undertakes an overall assessment based on both pillars. Given the one-off issue, it is possible that the Commission will place greater emphasis on the structural balance pillar for 2016 and not the expenditure benchmark as would normally be the case. With regard to 2017 and beyond, the AIB transaction will have no effect as compliance with the expenditure benchmark will be measured by reference to the level of expenditure in 2016.
29. Deputy Bernard J. Durkan asked the Minister for Finance to indicate, having regard to the many sacrifices and considerable progress made in the aftermath of the banking collapse, if the lending institutions might now be encouraged to accommodate borrowers who have made reasonable efforts to meet their mortgage or borrowing repayments in respect of loans, particularly those loans which were by today's standards unsustainable from the outset; if the lending institutions might refrain from repossessions until an amicable and reasonable solution can be found to meet the requirements of borrowers and lenders, and that the acquisition of loan books by third parties would not frustrate these objectives; and if he will make a statement on the matter. [17481/16]
View answerThe Government attaches great importance to addressing the issue of mortgage arrears and wants to keep families in their homes and avoid repossessions insofar as possible. In this context, it is important to note that there are a number of protections already in place to protect borrowers in arrears. In particular, the Code of Conduct on Mortgage Arrears (CCMA) sets out how mortgage lenders must treat borrowers in or facing mortgage arrears, with due regard to the fact that each case of mortgage arrears is unique and needs to be considered on its own merits.
The CCMA is a statutory code issued under Section 117 of the Central Bank Act, 1989. The CCMA applies to all regulated mortgage lenders operating in the State when dealing with borrowers facing or in mortgage arrears on their primary residence, including any mortgage lending activities outsourced by these lenders. Lenders are required to comply with all aspects of the CCMA and non-compliance with the CCMA is enforceable against regulated entities by the Central Bank.
Since revision in 2013 the CCMA requires all regulated lenders to wait at least eight months from the date the arrears arose before legal action can commence against a co-operating borrower. Separately, regardless of how long it takes the lender to assess a case, and provided that the borrower is co-operating, the lender must give three months' notice to the borrower before they can commence legal proceedings where the lender does not offer an alternative repayment arrangement or the borrower does not accept an alternative repayment arrangement offered by the lender. This gives co-operating borrowers time to consider other options such as a Personal Insolvency Arrangement.
The combined effect of these two protections (an eight month protection period and a requirement for three months' notice) is that, for a co-operating borrower, legal proceedings may not commence until three months from the date the letter (setting out one of the above positions) is issued or eight months from the date the arrears arose, whichever date is later. It is important to also note that the commencement of the court process is not a signal that a repossession will occur. It may often be the case that the process then prompts re-engagement by borrowers with cases being adjourned to allow both parties time to find a sustainable solution. Consequently, I would urge borrowers in arrears to contact the Money Advice and Budgeting Service (MABS) for free and confidential advice and support.
30. Deputy Michael McGrath asked the Minister for Finance if he or the Central Bank has any plans to conduct a review into whole-of-life assurance policies, which have resulted in some enormous hikes in premiums payable by policyholders, in order to maintain benefits; and if he will make a statement on the matter. [17530/16]
View answerI have established a task force in my Department to undertake a Review of Policy in the Insurance Sector. This Review is primarily intended to address issues in the non-life insurance sector in Ireland and so I would not anticipate that issues to do with the whole-of-life policies would be included.
The Central Bank of Ireland has informed me that it has no current plans to review the sale of unit linked whole-of-life products. However, it considers these products in its risk and evidence-based approach to prioritising its work. This ensures that it is focusing its resources on those areas where it considers there to be a significant threat to its consumer protection objectives. This includes carrying out a comprehensive annual consumer risk assessment, whereby it examines each of the retail sectors regulated by the Central Bank to identify current and emerging risks.
In general, whole-of-life policies are designed to provide consumers with life cover for their whole life. As long as the policyholder makes regular payments sufficient to maintain the chosen benefits, this type of cover will pay a lump sum on the death of the policy holder.
The regular payment into the plan covers the cost of providing the benefits chosen on the plan. In the early years the payments are higher than the cost of the policyholder's benefits. The extra money paid goes into the plan fund. Protection benefits get more expensive as policy holders get older; usually as the plan progresses the payments begin to equal the cost of the chosen benefits. In the later years of reviewable protection plans, the cost of the benefits increases significantly. In order to keep the level of benefits at the current level of payments, the difference is made up from the plan fund.
During its regular policy reviews, the insurance company assesses whether the consumer's current level of payment is sufficient to maintain the level of cover desired.
31. Deputy Joan Burton asked the Minister for Finance the amount of funding made available through the Ireland Strategic Investment Fund, ISIF, for social and affordable housing provision; if he is satisfied with the current rates of interest being charged to borrowers through the fund; if he is reviewing the operation of the mechanisms through which credit is accessed from the fund; and if he will make a statement on the matter. [17522/16]
View answerThe Deputy may be referring to ISIF's investment in Activate Capital. Activate is not aimed at social and affordable housing but at residential housing shortages in the main urban centres. Activate's base lending rate is approximately 10% and, as would be expected there is participation in any equity upside if projects succeed. This means that ISIF and by extension the taxpayer shares in any gains.
In the area of social and affordable housing, ISIF is engaging across a wide range of stakeholders, including private sector investors, with a view to identifying opportunities to invest. This is in accordance with the recently published Social Housing 2020 strategy paper which references the ISIF as a potential source of capital for the sector.
Key factors which must be addressed to facilitate ISIF involvement in such projects include the commercial viability of proposals, Eurostat treatment of fund structures which receive the majority of their revenue from Government sources and the ability to create off-balance sheet vehicles, outside of the existing PPP model.
Commercial investment of scale in the social and affordable housing sectors in Ireland has not evolved to the same extent in Ireland as it has in the UK and elsewhere in Europe. To date no strategic and deliverable investments of scale have emerged. ISIF inform me that they are actively engaging on a range of potential investment opportunities which have the potential to evolve into investments which meet ISIF's statutory mandate to invest on a commercial basis in a way that supports economic activity in Ireland.
A review of the strategy of the ISIF will take place in the second half of 2016, after the first 18 months of the Fund's operations have elapsed. A decision to conduct a review was based on its unique mandate as a sovereign development fund, with its double bottom line which is to invest: (i) on a commercial basis; and (ii) in a manner designed to support economic activity and employment in Ireland. The review will be conducted in accordance with the NTMA (Amendment) Act 2014 which provides that ownership of the Fund rests with the Minister for Finance. The exact details of the process and timelines of the review have yet to be considered fully and decisions on these issues will be taken in the lead up to the review's commencement.
32. Deputy John Paul Phelan asked the Minister for Finance in view of the recent success of a number of Irish films internationally, his plans to improve the section 481 tax relief; and if he will make a statement on the matter. [13265/16]
View answerFollowing an economic impact assessment of the Film Relief, published in December 2012, and in line with the Programme for Government commitment to 'reduce, cap or eliminate income tax reliefs that benefit high income individuals', I made a number of changes to the film tax relief scheme with effect from January 2015. Primarily, these changes amended the scheme so that instead of providing for tax relief at an individual's marginal rate for an investment made in a qualifying company, a corporation tax credit is paid directly to a film producer company.
The amount of the credit is 32% of the lowest of:
- eligible expenditure (which is generally the amount spent on the employment of eligible individuals, goods, services and facilities in the State),
- 80% of the total cost of production of the film, or
- €70 million.
The amount of the credit was increased to €70 million with effect from 1st May 2016, from €50 million. This increase was made in recognition of the importance of Ireland's film industry to our cultural economy and aims to attract higher budget films to Ireland. An increase to €70 million struck an appropriate balance between providing a sufficient increase to attract big budget films, while also being mindful of the possible cost to the public finances if a number of such films were to come to Ireland. I intend to monitor the scheme to see the impact of these changes.
33. Deputy Joan Burton asked the Minister for Finance if he and the Minister for Transport, Tourism and Sport have received initial recommendations following a review of rising motor insurance compensation; if he will provide a full update on the review of policy in the insurance sector which his Department is currently undertaking in consultation with the Central Bank; the reforms he is considering to tackle the problem of motor insurance premiums, which are rising at an annual rate of as much as 35%; if he will urgently update the book of quantum; and if he will make a statement on the matter. [17520/16]
View answerI have established a task force in my Department to undertake a Review of Policy in the Insurance Sector.
The first phase of the work of the task force is a Review of the Framework for Motor Insurance Compensation. This is being carried out jointly with the Department of Transport, Tourism and Sport. This review also deals with broader issues around the Insurance Compensation Fund. My colleague the Minister for Transport, Tourism and Sport and I expect to receive this first Report shortly.
Separately, the broader work of the task force includes an examination of the factors underlying the recent increases in the cost of motor insurance but also including other aspects of insurance policy such as the availability of insurance at reasonable cost to particular businesses and sectors of the community which are reported to be having problems in this regard. This work is being undertaken in consultation with the Central Bank of Ireland, other Government Departments, Agencies and interested bodies. The aim of the review is to to recommend measures to improve the functioning and regulation of the insurance sector in Ireland, identifying the issues that can be addressed on a more immediate basis and those that need more long-term policy implementation. This work will be completed over the coming months.
With regard to the Book of Quantum, I welcome the review currently being undertaken by the Personal Injuries Assessment Board, under the aegis of the Department of Jobs, Enterprise and Innovation. I am informed that that Review is expected to be completed soon.
34. Deputy Frank O'Rourke asked the Minister for Finance if he will consider deploying some of the unused funds allocated to the Credit Union Restructuring Board, ReBo, to support the development and growth of the sector, in line with commitments entered into on the formation of the Government, in particular in relation to supporting the information technology infrastructure and new product offerings; and if he will make a statement on the matter. [17532/16]
View answerSection 57 of the Credit Union and Co-Operation with Overseas Regulators Act 2012 (2012 Act) provides for the establishment of the Credit Union Fund as a source of funding for restructuring and to meet the expenses of the Credit Union Restructuring Board (ReBo) in carrying out its functions under the 2012 Act. In December 2012, I contributed €250m to the Credit Union Fund for the purpose of restructuring the credit union sector. The placing of money in the Fund had no impact on the general Government deficit as it is only when this money is spent that it impacts the deficit. This funding has always been ring-fenced specifically to provide financial support for restructuring credit unions.
The terms of the Restructuring Scheme, agreed between the Department of Finance and DG Competition at the European Commission are specific to restructuring credit unions and are measures granted under a State aid scheme. There is no flexibility within the Scheme to provide funding for any measure other than restructuring. Therefore the deploying of funds for other uses would have State aid issues.
In 2015, ReBo conducted a detailed analysis of likely funding requirements and it estimates that its net use of the Credit Union Fund will amount to no more than circa €20m. This will enable the return of circa €230m to the Exchequer. While it was envisaged that significant funding would be required for credit union restructuring, it is commendable that the credit union movement itself has provided funding from within its own resources for this purpose, thus minimising the requirement for drawing on Exchequer funding.
ReBo continues to assist a large number of credit unions so its total expenditure will not be known for a number of months. There are now 218 credit unions, spread across 118 projects that have either restructured or are actively restructuring. Over 100 different credit unions have now successfully completed a transfer of engagements.
My Department is always open to examining any proposals from the representative bodies or individual credit unions in relation to the development of a strengthened and revitalised credit union sector. The Government's priorities remain the protection of members' savings, the financial stability of credit unions and the sector overall and it is determined to support a strengthened and growing credit union movement.
35. Deputy Martin Kenny asked the Minister for Finance if he will act to remove the blanket six-year Statute of Limitations on financial complaints, which reportedly may hinder persons whose tracker mortgages were wrongly removed from them; and if he will make a statement on the matter. [17510/16]
View answerThe Financial Services Ombudsman's Bureau was established under the Central Bank and Financial Services Authority of Ireland Act 2004. The legislation provides for an independent, impartial investigation and resolution of disputes between consumers and financial service providers.
This legislation also provides the Financial Services Ombudsman with various powers in order to determine jurisdiction on a complaint. Included in this is a statutory timeframe. Section 57BX (3)(b) of the Act provides:-
"A consumer is not entitled to make a complaint if the conduct complained of - occurred more than 6 years before the complaint is made."
The current legislation thus prohibits the Financial Services Ombudsman from examining any aspect of a complaint where the conduct being complained of occurred more than 6 years from receipt of the Complaint in his Office. The Financial Services Ombudsman has no discretion in relation to the 6 years rule.
As the Deputy may be aware, the Department is progressing the development of the legislation to underpin the amalgamation of the Financial Service Ombudsman and the Pensions Ombudsman. The Government agreed outline Heads of a Bill to provide for the amalgamation of offices in 2015 and both offices have been physically merged in one location. Recent legislative changes have enabled the appointment of the Financial Services Ombudsman as Pensions Ombudsman.
The question of the timeframe under which complaints can be reviewed is a policy matter which will be considered as the legislation to effect the amalgamation is being developed further. I am of course mindful of the need to provide the necessary protection to the consumer over the longer term. However, the issues in this regard are complex involving a range of considerations including the interface with the statute of limitations, existing consumer protection laws, complaints mechanisms and the availability of records.
As the Deputy will be aware, this piece of legislation is currently on second list of the current legislative programme, that is, Bills that are expected to undergo Pre-Legislative Scrutiny this session.
36. Deputy Seán Crowe asked the Minister for Finance to list the changes in standard variable rates at the largest banks in the State since he met them in May 2015; and if he will make a statement on the matter. [17519/16]
View answerThe issue of variable rates in Ireland is a matter which I have been concerned about for some time. Last year I requested a report on the issue from the Central Bank. The Report entitled 'Influences on Standard Variable Mortgage Pricing in Ireland' was subsequently published on the Department's website and is available here: www.finance.gov.ie/sites/default/files/Influences%20on%20SVR%20Pricing%20in%20Ireland.pdf.
As you will be aware, I also met with the main mortgage lenders at that time and outlined my view that the standard variable rate being charged to existing and new Irish mortgage customers was too high. The banks agreed to review their rates and products and to have simple options to reduce monthly mortgage payments for standard variable rate customers. The banks publish details of their interest rates on their websites.
In September 2015 I concluded a series of follow up meetings with these banks and I think that it is fair to say that there have been considerable movements in the mortgage offerings of the Irish banks in the last twelve months.
More particularly, for example, since May of last year AIB have reduced their SVR on three occasions. There have also been cuts to loan-to-value variable rates and fixed rates at AIB, EBS and Haven as well as two SVR cuts at EBS and Haven. Furthermore, Bank of Ireland and Ulster Bank have reduced their fixed rates for mortgage customers, while Permanent TSB introduced new Managed Variable Rates (MVRs) based on loan-to-value, which should represent reductions for SVR customers. In addition, KBC reduced its SVR and fixed rates. These are just a sample of the offers available to customers.
Many of the banks also have offers of cashback or contributions towards switching fees to encourage switching customers. Furthermore, the fact that some of these measures have been announced recently is an illustration that competition does pressurise banks to make offers in order to attract and retain customers.
In this regard, I am pleased to note that a Central Bank statistical release of 10th June 2016 showed that Principal Dwelling House (PDH) mortgage rates fell across all instrument categories over the 12 month period ending in the first quarter of 2016. The most pronounced fall was observed for standard variable rate mortgages which declined by 49 basis points to 3.64 per cent over the year ending Q1-2016. Fixed rate PDH mortgage rates also declined, with rates fixed for 1-3 years falling by 34 basis points over the same period.
37. Deputy Thomas Pringle asked the Minister for Finance if he will take on board the Oireachtas Committee on Housing and Homelessness's recommendation to implement a moratorium on the repossession of houses; and if he will make a statement on the matter. [17499/16]
View answerThe Oireachtas Committee on Housing is to be commended for its work and the comprehensive review it has produced, which I and my officials will carefully study.
The Government attaches great importance to addressing the issue of mortgage arrears and wants to keep families in their homes and avoid repossessions insofar as possible. In this context, it is important to note that there are a number of protections already in place to protect borrowers in arrears. In particular, the Code of Conduct on Mortgage Arrears (CCMA) sets out how mortgage lenders must treat borrowers in or facing mortgage arrears, with due regard to the fact that each case of mortgage arrears is unique and needs to be considered on its own merits.
The CCMA is a statutory code issued under Section 117 of the Central Bank Act, 1989. The CCMA applies to all regulated mortgage lenders operating in the State when dealing with borrowers facing or in mortgage arrears on their primary residence, including any mortgage lending activities outsourced by these lenders. Lenders are required to comply with all aspects of the CCMA and non-compliance with the CCMA is enforceable against regulated entities by the Central Bank.
When it was introduced initially the CCMA contained a six month (later extended to 12 months) moratorium for co-operating borrowers whose mortgage was in arrears (or pre-arrears). This was revised in 2013 and replaced with a requirement that a lender is required to wait at least eight months from the date the arrears arose, before legal action can commence against a co-operating borrower. Separately, regardless of how long it takes the lender to assess a case, and provided that the borrower is co-operating, the lender must give three months' notice to the borrower before they can commence legal proceedings where the lender does not offer an alternative repayment arrangement or the borrower does not accept an alternative repayment arrangement offered by the lender. This gives co-operating borrowers time to consider other options such as a Personal Insolvency Arrangement.
The combined effect of these two protections (an eight month protection period and a requirement for three months' notice) is that, for a co-operating borrower, legal proceedings may not commence until three months from the date the letter (setting out one of the above positions) is issued or eight months from the date the arrears arose, whichever date is later. It is important to also note that the commencement of the court process is not a signal that a repossession will occur. It may often be the case that the process then prompts borrowers to re-engage with their bank and to find a solution. Often these cases are adjourned to allow both parties time to find a sustainable solution.
It should also be noted that in a repossession case before the Courts a borrower's rights are not confined to the provisions of the CCMA. The 2013 Land and Conveyancing Law Reform Act has provided a new statutory avenue to borrowers in a repossession case involving a primary dwelling to seek an adjournment of the repossession case to allow the borrower the opportunity to consider and, if so decided, to propose a Personal Insolvency Arrangement (PIA) to creditors in order to resolve an unsustainable debt position. If this is approved by the Court, the debtor would then be in a position to formally propose an alternative and sustainable payment arrangement irrespective of whether or not the primary home lender considered or rejected such an arrangement under the CCMA. Also, under a PIA there is an onus on the personal insolvency practitioner to, insofar as is reasonably practicable, formulate a proposal on terms that will not require the debtor to dispose of an interest in, or cease to occupy, a private principal residence. Even if such a PIA proposal is rejected by creditors, the Personal Insolvency Act has now been amended to provide that the proposal can then be submitted to a Court for adjudication.
The numbers in mortgage arrears have been steadily declining. Data released by the Central Bank on 10 June shows that to end-Q1 2016, the number of mortgage accounts in arrears for principal dwelling houses (PDH) has declined for the last eleven quarters. Some 120,447 PDH accounts were also classified as restructured. It is clear that where a borrower actively engages with their lender with a view to agreeing a sustainable arrangement to address their mortgage arrears, it is more likely that an equitable arrangement will be found and that borrower will be able to remain in their family home. Consequently, I would urge borrowers in this situation to contact the Money Advice and Budgeting Service (MABS) who are in a position to provide free and confidential support to borrowers.
38. Deputy Clare Daly asked the Minister for Finance if he believes that the framework agreement between the State and the banks is fit for purpose, given the numbers of repossession cases and manner in which they have been handled; and if he will make a statement on the matter. [17495/16]
View answerThe Relationship Framework documents for AIB, Bank of Ireland and Permanent TSB were specified and published in March 2012, while Permanent TSB's was also amended on 23 April 2015.
The framework documents, which generally formed part of the recapitalisation agreements, define the relationship between the Minister and the relevant institution. These documents are drafted and structured to ensure that the institutions will operate on a commercial basis and independent of the Minister in respect of their day to day operations. The role of the Minister is also set out and reflects his shareholding in the relevant institution and also the other support provided to that institution.
As a result the Minister has no statutory function in relation to the day to day banking decisions made by individual lending institutions at any particular time and these are taken by the board and management of the relevant institution.
However from a general policy perspective, the approach of the Government is to support people in genuine mortgage arrears and where feasible, to put in place a sustainable restructure to address and resolve such a difficulty. This is clearly set out in the Code of Conduct on Mortgage Arrears where it requires a lender in respect of a cooperating borrower to explore all of the options for an alternative repayment arrangement offered by that lender and that a lender must document its consideration of each option examined and the reasons why the options offered or not offered to the borrower are, or are not appropriate and sustainable.
If a solution cannot be agreed between borrower and lender, or if it is agreed that a mortgage restructure is not a sustainable solution, there are alternative mechanisms available to allow a debtor remain in the house in appropriate cases. For example, the Mortgage to Rent scheme is available in cases where the house and household would be appropriate and eligible for social housing. Where the borrower and lender cannot agree on a sustainable mortgage restructure, the debtor has the option to formulate and propose a PIA to his/her secured and other creditor(s). This initiative rests solely with the debtor and in formulating a PIA, a personal insolvency practitioner is under an onus, insofar as is reasonably practicable, to formulate the proposal on terms that will not require the debtor to dispose of an interest in or cease to occupy a principal private residence.
39. Deputy Richard Boyd Barrett asked the Minister for Finance in the context of the budget 2017 process, if he intends to take action to tackle corporate tax loopholes and address the very low effective tax rate being paid by many large corporations; and if he will make a statement on the matter. [17503/16]
View answerIt is important to recognise that companies in Ireland pay an effective corporate tax rate that is very close to the 12.5% headline rate. In 2014 my Department published a comprehensive Technical Paper on Effective rates of Corporation Tax in Ireland. The Paper concludes that, using the most appropriate calculation methods, the effective corporate tax rate paid in Ireland has averaged between 10.7% and 10.9% since 2003.
However, I recognise that mismatches between countries and out of date international tax rules have resulted in companies paying lower rates of tax globally. In this light, work on tackling corporate tax loopholes and aggressive tax planning has been a key priority for Governments around the world in recent years. Ireland has been actively involved in and supportive of this work. Ireland fully supported the OECD BEPS project and has been at the forefront of implementing the BEPS recommendations. We were one of the first countries in the world to introduce Country by Country Reporting to tax authorities as recommend by the BEPS project. Ireland is also heavily involved in work to implement the remaining BEPS recommendations by way of a Multilateral Instrument that will update global tax treaties to ensure they are fully in line with agreed international best practice. This instrument is expected to be open for signature by countries by the end of 2016.
At the ECOFIN meeting last week I expressed my strong support for the Anti-Tax Avoidance Directive which seeks to implement a number of the BEPS recommendations within the EU. That Directive has now reached political agreement and work will now focus on implementing the measures contained in the Directive.
40. Deputy Seán Crowe asked the Minister for Finance the reason Ireland is committed to appealing a decision on the Apple state aid case if it finds that state aid was present; the latest estimate of his Department of the potential amount that could be repayable to the State; and if he will make a statement on the matter. [17518/16]
View answerIn June 2014, the Competition Directorate of the European Commission announced its intention to open formal State Aid investigations into tax rulings provided to a number of companies in various Member States of the European Union. Since October 2015, investigations in three other Member States have concluded. In each of these cases the Commission found that the Member States granted an illegal State Aid to the companies in question.
While the Commission has opened a formal investigation in relation to one particular case involving Ireland, it has not made a final determination in the matter. While there is no formal timeline for when the final decision will be made in our case, I am aware of speculation about a possible decision in July.
This is a priority matter and Ireland has co-operated fully with the process to date and will continue to do so. My Department has engaged closely with the Commission throughout this process. Detailed and comprehensive responses have been provided to the Commission demonstrating that the appropriate amount of Irish tax was charged in accordance with the relevant legislation, that no selective advantage was given and that there was no State Aid.
I remain of the view that there was no breach of State Aid rules in this case and that the legislative provisions were correctly applied. In the event that the Commission forms the view that there was State Aid, Ireland is entitled to challenge this decision in the European Courts. As the Government has already indicated, we will take that course of action, if necessary, to continue to vigorously defend the Irish position. Ireland will appeal the decision because we believe that no State Aid was granted and this view is strongly supported by our legal advice.
In the event of a finding of State Aid, the potential sum of money to be recovered would be determined on the basis of the Commission's decision. As there is no indication at this point as to what decision the Commission may make, it is not possible to speculate regarding any recovery amount.
41. Deputy Joan Burton asked the Minister for Finance if he shares the views recently expressed by the Dutch Minister for Finance and chairman of the eurozone Finance Ministers, Mr. Jeroen Dijsselbloem, that European Union Finance Ministers are concerned that the European Commission is not applying budget laws in the same way to large and small countries and is undermining confidence in the rules; and if he will make a statement on the matter. [17523/16]
View answerI am aware of Mr. Dijsselbloem's views on the matter. However, this topic was not in the agenda of the last Eurogroup meeting.
I believe all Member States should be treated equally concerning the application of EU budget laws, regardless of whether they are small or large countries.
However, I also understand that some degree of flexibility should be allowed in certain circumstances, where this is appropriate, within the rules of the Stability and Growth Pact.
For instance, the deadline for Ireland to correct its excessive deficit were extended on two occasions (2009 and 2010) due to unexpected adverse economic events with major unfavourable consequences for government finances. Ireland's Excessive Deficit has been corrected in a durable manner and the country is now subject to the preventive arm of the SGP.
42. Deputy Catherine Murphy asked the Minister for Finance when agreeing to shorten the duration of time for the disposal of National Asset Management Agency assets, what consideration was given as to the way those assets were bundled into tranches; if those tranches were designed for convenience of sale or for optimum return; and if he will make a statement on the matter. [17498/16]
View answerNAMA's purpose and objectives are set out in the NAMA Act as established by the Oireachtas. NAMA's primary objective is, as per Section 10 of the NAMA Act, to obtain the best achievable financial return for the State and to deal expeditiously with its assets in acheiving this objective. The strategy which NAMA adopts in pursuing its objectives is a matter for the NAMA Board.
As Minister, I do not have a role in NAMA's commercial decisions. However, while respecting NAMA's independence, I and my officials regularly engage with NAMA regarding its performance and strategy.
I maintain a regular dialogue with the NAMA Chairman and receive appropriate updates regarding NAMA's ongoing progress and future plans. I have also met occasionally with the NAMA Board, which provides me with an opportunity to share my views and understand the Board's views.
My officials meet with NAMA executives on a monthly basis to discuss NAMA's current and expected performance.
In-mid 2014, my officials produced a report under Section 227 of the NAMA Act, assessing the extent to which NAMA had made progress toward achieving its overall objectives and whether the continuation of NAMA was necessary for the purposes of the Act.
The report concluded that NAMA had made significant progress in achieving its overall objectives, and based on its performance and financial projections in light of the strength of investor interest in Ireland, was well positioned to achieve its overall objectives and so continued to be necessary.
In the context of this report, consideration was given to the various strategic alternatives that may or may not facilitate NAMA achieving and ideally surpassing its objectives. The Section 227 Review is available on the Department of Finance website via the following link: www.finance.gov.ie/sites/default/files/NAMA_Section_227_Review_web2.pdf.
Extensive engagement around this report and ongoing regular engagement with NAMA has allowed my officials to form an independent view of NAMA's progress and the strategic options reflected in this report. This engagement continues and the ongoing consideration of strategic options naturally includes an element of challenge from both sides in evaluating the pros and cons of various strategies.
Following on from the Section 227 review of NAMA, I fully endorsed the view of the NAMA Board that it should take advantage, to the greatest extent possible, of favourable Irish market conditions by increasing the flow of assets to the market while remaining faithful to its purpose and objectives under the NAMA Act.
I am further advised that decisions by NAMA as regards the optimal means of disposing of loans and assets - individual asset sales, portfolio sales, debtor connection loan sales or multi-connection loan sales - were guided by the objective of optimising the return to taxpayers and of taking full advantage of market liquidity and investor interest.
