Dáil Éireann Debate, Wednesday - 9 September 2020
90. Deputy Catherine Murphy asked the Minister for Finance the amount borrowed by the State to date from the European Commission under the SURE initiative; the way in which the funds will be distributed here; and if he will make a statement on the matter. [22738/20]
Amharc ar fhreagraThe SURE instrument is intended primarily to support Member States with efforts to protect workers and jobs, and also support some health-related measures. It is temporary in nature, with the duration and scope limited to tackling the consequences of the coronavirus pandemic. It was adopted at ECOFIN, and published in the Official Journal of the European Union on 19 May 2020.
Briefly, the Commission will borrow on financial markets to finance loans to Member States, allowing Member States benefit from the EU’s strong credit rating (AAA) and low borrowing costs. Under the proposal, SURE will provide financial assistance to Member States of up to €100bn in total. The loans are targeted to assist Member States to address sudden increases in public expenditure caused by the Covid-19 pandemic, in order to preserve employment (such as short-time work schemes and other similar measures put in place for the self-employed) and certain occupational health expenditure.
SURE would come with safeguards to ensure fair and equitable access to funding for MS, with no more than €60 billion available to any three MS, under the proposal. The loans will be underpinned by a system of voluntary guarantees from Member States. For a lending volume of €100bn under the SURE instrument, €25bn in guarantee commitments are required from all Member States collectively. This guarantee mechanism ensures MS do not have to pay any money upfront. The instrument would not become available until all Member States sign up to their guarantee amount, and these commitments would remain in place for the full term of the loans which they are underwriting.
Each Member State contributes to the guarantee in proportion to its relative share in the total Gross National Income of the Union. For Ireland, this would be equivalent to €483m (1.9% of EU-27 GNI).
On 24 and 25 August the EU Commission published plans to give €87.3bn in loans to 16 Member States as part of the first tranche of SURE loans. Once the Council approves these applications, financial support will be provided in the form of loans making use of the EU Commission’s low cost of borrowing. This funding will be made available over the course of the coming months. The remaining €12.7bn is available for disbursement. There will be more than one tranche of funding.
A decision to make a formal application to the SURE loan scheme will be taken by Government in the coming weeks and the necessary information is being prepared at present. It is likely that the expenditure on the (now ended) Temporary Wage Subsidy scheme will be largely eligible for the SURE instrument.
