(Donegal South-West): The policy in relation to the provision of export credit insurance is to assist Irish companies in the sale abroad of Irish goods and services, while at the same time operating the scheme at no net cost to the Exchequer, over time. This means that it is necessary to adopt a prudent approach to underwriting, balancing very carefully the needs of Irish exporters against the risk of non-payment by their foreign buyers, which would result in the payment of claims from taxpayers' money.
Short-term policies were issued or renewed in 1991 which had a potential liability of some £127 million in respect of sales of goods and services where the credit period did not exceed one year. No medium term policies, which relate to longer term contracts for the sale of capital goods and services with a credit period of up to five years were issued in 1991. The State ceased to provide cover for short term commercial risk at the end of 1991 and, as a result, total cover under short term policies issued and renewed in 1992 reduced to £1.66 million. One medium term policy covering just under £8 million was issued last year.
The allocation of £11.42 million in the 1993 Departmental Estimate provides for repayment to the Central Fund of advances made to meet net liabilities which arose in the perid 1 April, 1991 to 31 March, 1992 and does not relate to any cover which will be written this year.
Of the £11.42 million, almost £6 million related to claims paid in respect of pharmaceutical, electrical and healthcare services and most of the balance was made up of two large claims, one in respect of food and drink exports, and one in respect of a construction contract.
Regarding the question of an EC scheme to support credit, while measures to harmonise export credit schemes in the member states are under examination, I would consider it unlikely, having regard to the views of many member states, that an EC scheme will be developed, at least in the foreseeable future. We, of course, continue to press for the introduction of such a scheme, at every available opportunity, as the Irish export credit scheme, due to its small scale of operations compared with most other EC state export credit schemes, will never be capable of competing with what they can offer.