Dáil Éireann Debate, Thursday - 12 October 2023
9. Deputy Robert Troy asked the Minister for Enterprise, Trade and Employment if he will consider introducing an export credit guarantee scheme to support companies looking to increase their international trading opportunities; and if he will make a statement on the matter. [44194/23]
View answerI am asking this question in place of my colleague, Deputy Troy. Has an export credit guarantee scheme been considered? If the Minister introduced such a scheme, it would provide great support to companies that are seeking to increase international trading opportunities. It would be very welcome and of great assistance.
I welcome to the Gallery the young person who is cheering us on up there. Their father is desperately walking around trying to keep them quiet.
I thank the Deputy for the question. My Department regularly explores ways to assist businesses and create an environment that stimulates their growth. However, it is important that Government intervention be focused on those areas where there is genuinely a market failure. My Department, working with Enterprise Ireland offers a range of supports for exporting businesses, such as training, in-market support and trade missions. My Department has also developed several schemes, working through the Strategic Banking Corporation of Ireland. These provide financing support for businesses, including exporting businesses, and they include the Ukraine guarantee scheme, on the basis of which the Government takes some of the risk, and the growth and sustainability loan scheme, which we launched recently.
Export credit insurance is available from the private market. In early 2020, in the context of the major disruptions to global trade and supply chains in the early stages of the spread of Covid, my Department completed an assessment of the need for State-supported export credit insurance. The assessment found that Irish insurers, as subsidiaries or branches of international insurer groups, are financially strong and did not need to be financially supported by the Government intervention during the pandemic.
My Department has continued to monitor the export credit insurance market. In 2021, with the assistance of an external export credit insurance expert, it conducted an internal review to assess the potential need for a State-backed export credit insurance scheme. This review involved engagement with trade credit insurers, industry and other relevant stakeholders, such as Enterprise Ireland and IDA Ireland. Following these consultations and on reviewing Ireland's strong trade export statistics over the past ten years, it was again found that there was no clear demand or need for State intervention in terms of export credit insurance.
Exports and international trade will remain central to Ireland’s growth model and economic strategy in the years to come.
I thank the Minister and take his response in good faith. I note the Department's research. Its view is that it is not necessary. If that is the case, I take it in good faith. However, it surprised me to learn that Ireland is one of only two EU countries that do not have an export credit guarantee scheme in place. It has been said to me and to Deputy Troy, who tabled this question and who published an article about the topic, that we have tried to boost and support indigenous firms in the export space. I am well aware of the position in my constituency. The Kildare local enterprise office, LEO, and Kildare Chamber of Commerce did great work in that area. I am supportive of them.
I heard what the Minister said about there being no evidence of market failure. If that is the case, it is good news. There may not be market failure, but I sometimes see a gap between employers and companies that are clients of Enterprise Ireland and those who engage with the LEOs. Somewhere in the middle there is a space where companies are too large to work with a LEO but perhaps not big enough to work with Enterprise Ireland. They can sometimes fall into a void. Sometimes those companies say they would like to get into the export space a little further and expand their offerings for good reasons but perhaps struggle to do. Some additional supports may be of assistance to them.
The Deputy might remember, although it seems like a long time ago, that Ireland was in the space of export credit insurance in the past. Following the beef tribunal report, the then Government essentially decided to phase it out. Based on the findings of a review carried out later, the then Tánaiste, Mary Harney, concluded that the insurance exposure levels imposed on the State were disproportionate to the benefit they might give to exporters. As a result, the scheme was suspended after 1998.
That said, we have to have an open mind about this in the future, For example, if Irish companies are exporting to Ukraine in a post-conflict environment and there are risks the State needs to think about in the context of facilitating exporters to a market that may be deemed to be riskier than others. we need to keep an open mind and we will. At the moment, however, Ireland's export trade statistics are strong. Last year, for the first time, we passed the €1 trillion mark in our international trade statistics on importing and exporting goods and services. That is an extraordinary figure. We need to keep this under review. The Deputy is correct that the vast majority of EU member states have export credit schemes. I will keep an open mind on the matter.
I again thank the Minister. I accept his answer.
It is interesting that 1998 is the year it ceased. I vaguely remember that. I was not involved in politics at the time obviously, but I have read about the beef tribunal and so forth. I was aware there were issues around that. However, 1998 is a long time ago. It is before the Good Friday Agreement was signed and before there was an internet or social media. Francis Fukuyama told us it was the end of history and that western liberal democracy had triumphed. Unfortunately, we are still working on that. There has been a lot of water under the bridge since and the environment we are trading in may be more volatile and may continue to grow in volatility vis-à-vis what might have expected to mature and settle at that time. I will leave it there. I thank the Minister for his response. I also thank Deputy Troy for raising the issue and for his work in this space in the past.
As I said, we have a policy on enterprise that sets an ambition of expanding Ireland's exporting base by an additional 2,000 companies before the end of this decade. We have, as I stated earlier, extended the mandate of the LEOs. We are trying to get more companies to scale up. Basically, we are trying to build multinationals out of Ireland, as well as to bring multinationals to Ireland from abroad. That relies on healthy trade growth, entering new markets and more diversification in a post-Brexit environment, for example, to other parts of the EU and the world, in order that we will not be overly reliant on one market. This all means that we have to constantly rethink how we can support companies to export and help them to de-risk when they are expanding, growing and investing in their potential. Export credit insurance has to be part of that discussion. The last review we did of this, which was detailed, suggested that there was no market failure. However, that does not mean we should not have an open mind in the future, and we will.
