Dáil Éireann Debate, Thursday - 5 July 2018
92. Deputy Pearse Doherty asked the Minister for Finance the specific changes he has introduced in the Home Building Finance Ireland Bill 2018 as a result of discussions with the EU Commission; and if he will make a statement on the matter. [29884/18]
View answerHome Building Finance Ireland (HBFI) is to be established to provide funding on market terms to viable residential development projects whose owners are experiencing difficulty in obtaining debt funding. The legislation establishing HBFI, the Home Building Finance Ireland Bill 2018, was published on 18 June 2018 and is now commencing its passage through the Oireachtas. It is envisaged that the HBFI legislation will be enacted shortly after the summer recess, and HBFI will begin accepting applications for lending before the end of 2018.
HBFI is not intended to distort or displace any funding currently in the market. It is intended to provide a lending option to all developers delivering residential property in Ireland at market equivalent terms and therefore it is not considered that this initiative has any State Aid implications. HBFI would not be a dominant player in the residential funding market and it would clearly leave room for banks and other finance providers to increase their contribution to funding much-needed residential development.
As HBFI will be competing directly in the market, the Irish authorities have at an early stage informally contacted the services of the EU Commission in relation to this Bill to outline the proposal in detail and illustrate how the establishment of HBFI does not contravene EU State aid rules. Considering that officials in the Department of Finance have been cognisant of State aid issues since the inception of the initiative, and that the HBFI Bill was drafted to pre-emptively avoid contravening such rules, minimum changes to the text of the Bill were introduced as a result of discussion with the Commission's services. Any changes that were made were of a technical nature and have no impact upon the policy goals or implementation of HBFI.
This consultation has now concluded with officials in the Commission having communicated that they have at this stage no further questions concerning the initiative. It is important to note that this communication is not a formal decision and will not bar a State Aid complaint being made to the EU Commission by a third party in the future.
It continues to be essential that the HBFI Bill maintains compliance with EU State Aid rules as it passes through the Oireachtas, as any deviation from this may result in the necessity to apply to the EU Commission for State Aid approval in accordance TFEU Article 108. The effect of this would be to materially delay the establishment of HBFI as under Article 108 a Member State is obliged to await the outcome of the Commission's investigation before implementing any notified measures.
