Gerald Nash (Louth, Labour) | Oireachtas source

I move amendment No. 6:

In page 7, line 17, after “section” to insert “and section 11of the Credit Guarantee (Amendment) Act 2015”.

Section 4 of the principal Act, entitled "Power of Minister to give guarantees", contained a number of important elements including the spread of risk and an effective monetary cap of €11.25 million on the State's contingent liability being the product of the 75% limit on individual loans in subsection (2), the 10% portfolio cap in subsection (3) and the €150 million aggregate limit in subsection (4). One of the main findings of the review that led to this legislation and these amendments in the first place was that the risk elements were disproportionately skewed in favour of the State. The Government agreed to increase the 75% and 10% figures to 80% and 13%, respectively. The latter is in line with State aid requirements and advice we received. Another implication of this is that the State's maximum contingent liability also increases to €15.6 million and the Government decided that the combination of both credit and counter guarantees should have this combined ceiling of €15.6 million. For that reason, there are linking cross references to the new section 11 on counter guarantees. I commend these amendments to the committee.

The purpose of amendment No. 24 is to place a maximum monetary limit on the liability that the Minister for Jobs, Enterprise and Innovation can incur in any one year from entering into both the credit and counter guarantee schemes. This amendment will ensure that the Minister does not enter into any combination of credit guarantees and counter guarantees that would exceed a maximum monetary limit of €15.6 million in any one year. The Department will ensure adherence to this overall limit by stipulating in each counter guarantee scheme an agreement with promotional financial institutions, the methodology by which the limit cannot be exceeded. I commend the amendment to the committee.