Edward Nealon
Ceist:49 Mr. Nealon asked the Minister for Finance if he has satisfied himself with the proportion of European Investment Bank moneys which now go to private industry; and if he will make a statement on the matter.
Vol. 434 No. 4
49 Mr. Nealon asked the Minister for Finance if he has satisfied himself with the proportion of European Investment Bank moneys which now go to private industry; and if he will make a statement on the matter.
In 1992 the European Investment Bank EIB provided loans totalling 16.9 billion ECU — IR£13.5 billion — within the European Community of which nearly half went to the private sector. This is a sizeable proportion of EIB's lending activities and represents a valuable contribution to the balanced development of the Community as over 70 per cent of it went to the underdeveloped regions.
Since 1973 EIB lending to the Irish private sector has totalled approximately IR£255 million, made up mainly of loans to small and medium-sized enterprises. In recent years, however, the take-up of EIB loans by the Irish private sector has been relatively low at some IR£21.2 million since 1991.
A number of reasons could be put forward for this, such as the availability of competitive alternative domestic sources of finance, EIB's strict financial and security conditions and a reluctance on the part of Irish investors to take on the exchange risk which would be involved in borrowing foreign currencies or to lock into long-term fixed interest loans at times when interest rates were perceived to be high. EIB lending is, of course, available only for long-term, economically viable, capital investment projects.