Dáil Éireann Debate, Thursday - 1 June 2017
5. Deputy Sean Sherlock asked the Minister for Public Expenditure and Reform the interactions he has had with the European Investment Bank on the issue of capital investment; the persons he met with; if he discussed the relaxation of Stability and Growth Pact measures; and the timeframes that were agreed for future discussions on European investment in capital infrastructure. [26404/17]
Amharc ar fhreagraThe last few minutes have felt like a form of intellectual water-boarding. Some people know a lot more about that than the rest of us.
Is that the best the Deputy can do?
This question is on the situation regarding capital investment and the European Investment Bank's capacity to genuinely assist Ireland as opposed to just talk about it.
Responsibility for policy on the Stability and Growth Pact rests with my colleague, the Minister for Finance. Both the Minister for Finance and I visited the European Investment Bank, EIB, in Luxembourg last week on 23 and 24 May 2017 and met with a large delegation of EIB officials led by President Werner Hoyer and Vice President Andrew McDowell. The purpose of our visit was to review progress in the ongoing discussions between the Irish authorities and the EIB taking place in sub-groups under the auspices of the Ireland-EIB financing group, which was established last year to explore possible ways for Ireland to access additional EIB funding for necessary projects. This was the second meeting of the financing group following its inaugural meeting in Dublin in December 2016. We had a wide-ranging discussion on the capital and infrastructural needs of the Irish economy and the key issues that arise in trying to address these needs. These include the limited fiscal space within which the Government must operate, the threats posed by Brexit and the assessment of priorities for additional funding that is currently under way as part of the mid-term review of the capital plan.
The EIB has now presented some suggestions on how the bank could provide new and innovative financing mechanisms for assisting small businesses and tackling infrastructure needs in ways that could prove useful to the Irish authorities in grappling with these issues. We have agreed a number of next steps. We will explore potential financing options for delivering metro north, drawing on the EIB's knowledge and experience of financing similar projects elsewhere. There is an agreement to engage in exploratory discussions on the EIB's knowledge and experience of different user-pay PPP or concession type models without prejudice to decisions we might make later in the year on particular projects. It was agreed, partly regarding mitigating the impacts of Brexit, to explore the potential for the EIB to become involved in funding a scheme to provide access to the enterprise and agriculture sectors. Follow-up meetings on all of those topics have now taken place.
I thank the Minister for that reply. When senior European office holders speak, they often refer to the European project. If there is one thing which will kill Europe, it is the startling failure of almost all European countries, rich and poor, to invest in capital infrastructure and next-generation facilities. When one looks at people living more impoverished lives, part of the cause is that the infrastructure where they live, whether in inner cities, regions or very rural areas, has failed to keep up. That is the enormous difference between the Europe of the post-war era and the Europe of today. I am very pleased that the Minister met representatives of the European Investment Bank. While I am sure he and the Minister for Finance, Deputy Noonan, did their best, it is like wading through treacle to get these guys to talk in a way and within a timeframe that is meaningful. While I am grateful for the Minister's answer, all of the things he set out are on the very long finger whereas this country cannot afford to wait much longer on infrastructure.
I agree with some of the Deputy's analysis on the importance of infrastructure for Europe now. I contend that one of the great risks we face is that if we get the EU and the eurozone back on a trajectory of economic growth, it may not be inclusive, which it has to be. If one does not have infrastructure in place, whether it is housing or education, one will not be able to deliver inclusively. The EIB has already played a major role in Ireland over the last number of years in delivering projects like Luas cross-city, the Gort-Tuam road and the DIT project in Grangegorman. It has enabled a significant amount of infrastructural investment to take place. Building on that, the engagement we are having with the bank at the moment is not at all like trying to wade through treacle. What did the Deputy say again?
The Minister should not let Oliver Callan hear that.
Yes, indeed. We are having significant technical discussions with the bank at the moment to see if there are new ways to address the project needs we have. We have to decide what the project needs are first and then decide whether the EIB offers an attractive source of funding for them.
Again, I thank the Minister for his response. We have urgent requirements. Everyone agrees about housing. The critical issue having regard to housing development in this country is that it lacks scale. The EIB has very significant resources. None of the local authorities nationally, including the large urban ones, is talking about anything like 1,000 social houses. Everything is well under that, sometimes in the low hundreds, or tens, 20s and 30s. We are not going to be able to address the housing situation unless both affordable and social housing are part of the mix on a scaled basis. We have seen the European Investment Bank have a positive involvement in projects like roads, the DIT and schools bundles, but its average capital spend over the last ten years in Ireland, which has a growing population and an enormous demand in terms of foreign direct investment for public transport and so on, is less than €700 million a year. Has the Minister targeted specific amounts for infrastructure or will it be a case of taking whatever is offered?
No. I have a clear figure in mind as to where I think infrastructure investment needs to get. I am now working with all of my Government colleagues to decide what projects will get us there because while a figure is important, it is even more important to have quality projects in which we want to invest. As regards the funding role of the EIB, we must bear in mind that there are other options available to the State to fund projects like this. The EIB is one of them but there are others we might choose to take. The Deputy made the point in her opening contribution that the scale of delivery in housing is not delivering the many hundreds of units she believes are needed, which I agree with her about, but in my experience the issue is not so much where we are on funding, but rather where we are from a planning, regulation and policy point of view. That guides issues like density of development. These are the guiding factors on the scale of development we get, not the role of the EIB.
