Mr. Declan Hughes:

My thanks to Deputy O'Reilly. We have probably discussed this on previous occasions at the committee. Certainly, there are some dimensions I am keen to highlight. My colleagues might want to come in as well.

The first point relates to the demand side. We know that with regard to Brexit we are in a strange situation where many of the impacts are still working their way through. Businesses are working out what to do in terms of dealing with the additional cost of trade with Great Britain and the additional logistics costs relating to direct supply into Europe, etc. There are also investment costs relating to the need to change or diversify to new markets and address climate change challenges as well.

On the demand side, we have indications from the Central Bank and from our engagement with the State bodies group that meets across all the suppliers in respect of SBCI, the Ireland Strategic Investment Fund and Enterprise Ireland. We are confident that this scheme is at a level that will be needed in the coming months.

The second part relates to businesses. One of the key issues is that businesses are reluctant to borrow at the moment in view of the level of uncertainty in Great Britain and in the domestic economy. We have been hearing in respect of the Brexit loan scheme that, because the funding was guaranteed by the European Investment Fund's InnovFin facility, there was an innovation criterion. At one level it related to anything that businesses were going to invest. The point was that investment would have to go into diversifying or being innovative. That was a test and an issue that kept coming up with businesses and representative bodies. We have an SME and state bodies group where this point was specifically raised. Essentially, we will not have that criterion in future. We are dropping it because it comes from the European Guarantee Fund. The only criteria are in respect of the business having an exposure directly or indirectly. The business may not be trading directly with GB but some customers may be and they may be exposed. This may apply to businesses in the tourism sector or primary producers supplying a dairy company that is ultimately supplying the GB market. It may apply to a business importing as well. We have covered off maximum flexibility with the fund. They are the criteria.

There is a second element we have heard. Brexit has been happening since 2016 and we have been trying to get businesses prepared. Some are working through what were three-year schemes. We have now managed to extend this from three years to six years. One key requirement for businesses is that they work through the next year and the uncertainty. Moratoriums relating to this can be negotiated with the banks. A six-year period will allow businesses to work through the implications.

We will also have provision for refinancing. If there are already some loans that are on two or three years and are coming near the end, they can be refinanced. Again, that is something businesses have looked for in light of the uncertainty. Covid-19 has compounded the uncertainty relating to Brexit. We have also included another feature that was not included in the previous Brexit schemes relating to primary producers. Some of our other schemes that relate to horticulture businesses and others that are labour-intensive and are exposed were not included in the schemes so we have included those in this scheme. Another point is that flexibility on loan rates can be offered. We hope that, on the basis of what we have done with the credit guarantee scheme whereby we have brought in several other finance providers, including the credit unions, we would be able to increase the number of participants. This would broaden the range of financial providers available to impacted businesses.

In response to the Deputy's question, I would say we have been listening and we have certainly tried to maximise the flexibility of this scheme. Moreover, I believe we have sufficient headroom over the coming two years. This goes beyond the EU temporary aid framework that expires at the end of this year. We would then have this facility into next year.

The final question was whether we have sufficient headroom with this Bill. We are asking, with the committee's agreement, that we provide for €50 million to negotiate deals with the European Investment Fund and the European Guarantee Fund. The point is to get the €330 million fund up and running and we would use €29 million in this regard. We will have further headroom to introduce further schemes as either Minister or both together may see fit.

If we need to expand it in future, we would have the room to do that.