Oireachtas Joint and Select Committees

Wednesday, 13 March 2019

Committee on Budgetary Oversight

Scrutiny of European Commission Country Report Ireland 2019 and European Semester

Photo of Jonathan O'BrienJonathan O'Brien (Cork North Central, Sinn Fein) | Oireachtas source

Two of the questions I was going to ask were posed by previous speakers. I will not repeat them. I want to touch on Deputy Lahart's comments regarding non-performing loans, which are raised as a concern in the report. The Deputy put it very well when he stated that there is political consensus in this State. While we recognise non-performing loans as an issue, how they are being addressed is a concern to many of us. Those loans are being sold to vulture funds and there is a feeling among all political parties that we should do everything we can to help the indebted mortgage holders involved to remain in their properties. To do otherwise would only worsen the housing situation. We need to find a balance in continuing to reduce the number of non-performing loans while not impacting on the housing crisis. We need to find the right policy to get to grips with that.

Mr. Martínez Mongay mentioned the rainy day fund. I have concerns about that fund. I am a member of one of the parties that opposed its establishment. We have already outlined some of the reasons for our opposition. We are in the middle of a crisis across many sectors, particularly housing and health. We do not believe it is prudent to establish a rainy day fund at this time. We also have concerns regarding the legislation the Government used to establish the fund. That legislation provides for withdrawals from the fund in three circumstances: to remedy exceptional circumstances; for capital injection into the banking sector; and to support major structural reforms. Our reading of the legislation is that the rainy day fund cannot be used as a stabilisation mechanism. It is not countercyclical; it cannot be used on general spending above the expenditure benchmark. While it can be used for the purposes set out in the legislation, the only definition of "exceptional circumstances" we can find relates to terrorism and migration flow. We have concerns, therefore, that in order to withdraw money from the fund, we would need to seek approval from the European Commission. Despite repeated requests, there has been no indication from the Government whether any discussions have taken place with the European Commission on our ability to withdraw from the fund. I ask Mr. Martínez Mongay for his analysis on that.

The Commission's report refers to the need to underpin the national development plan by means of a robust monitoring system, adequately resourced Departments and a sound system of project selection. Does this mean that the European Commission has concerns regarding the existing monitoring system? Does the reference to adequately resourced Departments relate to personnel, finances, skills or labour? What resources need to be put in place? In light of the reference to a sound system of project selection, are there concerns about our current project-selection systems?

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