Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

Cuirim fáilte roimh an mBille atá os ár gcomhair inniu. Labhróidh mé ar an context níos leithne ó thaobh an tacaíocht atá ag teacht ón Eoraip do na fadhbanna ollmhóra atá againn mar gheall ar an eacnamaíocht agus an paindéim lena bhfuilimid ag déileáil ag an bpointe seo. Cuireann sé iontas orm nach bhfuil an tAire, an Teachta Donohoe, anseo. Scríobh mé chuige ar an 23 Márta agus léirigh mé sa litir sin na prionsabail agus na polasaithe a bhí ag Sinn Féin ó thaobh an tsástacht a ba chóir a bheith ag an Stát mar gheall ar chúrsaí eacnamaíochta na tíre seo. Cé go raibh cuid de na polasaithe a chur mé chun tosaigh ag déileáil le rudaí a bhí i lámha polaiteoirí anseo, mhol mé freisin an gá le freagra díreach a fháil, mar is ceart, ón Aontas Eorpach.

I welcome the introduction of this Bill which speaks to the broader European response to the crisis. However, before discussing the provisions of the Bill I wish to first comment on this broader response.

On 23 March I wrote to the Minister for Finance outlining the set of principles and policies that should underpin the Irish response to the economic downturn created by this pandemic. While it centred on specific domestic measures such as an income support scheme and financial assistance to business, I also addressed what I and Sinn Féin believed was the required response at a European level. I said that the European fallout to the health crisis was a European problem requiring a European response. This view was not just driven by the fact that Covid-19 pays no heed to borders, it was also a recognition that our fiscal response was constrained by a common fiscal framework. Additionally, it was a recognition that a monetary response and much else was in the sole hands of the European Central Bank, ECB. I made clear that if the level of debt refinancing necessary to deal with this crisis was to be possible, a radical departure from the past was necessary. As the European Commissioner for economic and financial affairs, Mr. Paolo Gentiloni, has said, we need to face an extraordinary crisis with extraordinary tools. I said in that correspondence that an essential tool in the kit would be in the hands of the ECB through its bond purchasing programme and I am pleased that the ECB, through its pandemic emergency purchase programme, has learned some of the lesson from the past and acted to ensure affordable levels of debt financing for member states such as our own.

It is now crucial that the fiscal response at a European level is adequate to meet the challenge we face. The Minister will play a crucial role in that response in his new role of president of the Eurogroup and if he we here, as I did privately, I would congratulate him on his appointment to that role. I urge him to ensure that the interests of Ireland are represented and delivered upon in his new role.

The Bill before us concerns access to capital to support workers and business that have been impacted by the economic fallout of Covid-19. In particular, it will enable the State to participate in two instruments designed at European level, namely, the SURE scheme and the EIB guarantee scheme. I will deal with each in turn and I note 140 pages of legislation with a very tight time for it to be scrutinised and a tighter time to make amendments.

On 9 April the Eurogroup agreed to a €540 billion fund to tackle the social and economic impacts of Covid-19. This fund and the measure it provided for were endorsed by the European Council on 23 April. Among them was SURE, temporary supports to mitigate unemployment risks in an emergency. This instrument will provide up to €100 billion with the fund raised on capital markets by the European Commission. While this will allow member states to benefit from low-cost borrowing due to the strength of Europe's collective credit rating, I wish to put on record that previous schemes financed by the Commission's borrowing from the capital markets came with damaging conditions attached. One of them, of course, was the European Financial Stabilisation Mechanism, EFSM, and we must ensure we never return to those austerity policies of the past. I ask the Minister of State to clarify in his summing up remarks that there are no conditions or expectations of that nature with regard to signing up to these schemes.

Section 3 of the Bill allows the State to enter the SURE guarantee and with the Minister granted all such powers required to perform the State's obligation under the scheme. Under the agreement provided for in Schedule 1 the State will contribute in excess of €483 million to avail of loans under SURE. These loans are targeted to assist member states in financing sudden increase in spending caused by a pandemic, in particular, spending targeting short-term work schemes such as the temporary wage subsidy scheme, TWSS.

7 o’clock

I ask the Minister to clarify the total values of loans or contribution we would be entitled to access, the criteria for use of the funds accessed under the loans and what quantum of loans the Minister intends would be permissible to draw down under this scheme.

Under section 4, a contribution in excess of €483 million will be paid out of the Central Fund under the terms of the SURE agreement. On Committee Stage, I will speak to amendments that my party seeks to give the Dáil greater oversight over payments made to the fund but I ask the Minister in due course to address a number of issues in this regard: the expected schedule of payments, their value and when they will be made under the provisions of the agreement, and similarly, the expected schedule of loans that will be drawn down under the scheme.

The other instrument this legislation will provide for is access to the EIB Covid-19 pan-European guarantee fund, which formed part of the fund agreed by the Eurogroup on 9 April. The fund will amount to €25 billion and mobilise up to €200 billion with a guarantee provided by each member state - a condition for access to the fund. As section 7 sets out, our liability to the fund will be capped at €168 million. For us, this fund will be administered by the EIB in partnership with the Strategic Banking Corporation of Ireland.

The guarantee fund will provide working capital to SMEs, to mid-caps and corporates that have been impacted by Covid-19. While this is welcome, a number of issues require clarification. Up to 23% of credit through the scheme will be earmarked for companies with over 250 employees and up to 7% to venture and growth capital funds, while at least 65% of the financing is earmarked for SMEs. What clarification can be given that this credit will be accessible for small businesses that have been unable to access credit to date from banks that refuse to lend? Also, I would appreciate if the Minister could provide clarity as to how financing under the scheme and its associated agreements can be incorporated into our own loan schemes and business supports. Measures taken at a European level benefit from our own contributions, but also a lower cost of financing. This will, in turn, benefit those businesses which are able to avail of financing under the EIB Covid-19 guarantee fund. It is, therefore, essential that the benefits of the scheme are open to Irish small and medium-sized businesses, not only big business.

Sinn Féin will not be opposing the provisions of the Bill. We have argued before and since this crisis began for a social Europe that invests in its people and serves the interests of sovereign member states, not only big business or unaccountable elites. We must ensure that the European response to this crisis serves those ends and provides for the issues I have raised in this speech and ensures that they are adequately addressed. If they are, my party will support this Bill.

However, there are a number of clarifications required. There is a number of further details required that we need to tease out on Committee Stage, in particular, in relation to the loan guarantee scheme and how the Strategic Banking Corporation of Ireland, which, as we know, is not a bank but a non-lender, will provide loans to the main lenders here in the State, what type of guarantees will be provided and what type of loans will we see drawn down. There is also reference to the Minister being able to set the type of lending criteria. We need to hear more about how that will work and, crucially, because we will deal with the credit guarantee scheme, how this will all interact with domestic legislation.

As I argued for in March last with the Minister, Europe had to step up. I believe Europe is stepping up. While there is much more that they can do and while we have concerns in relation to some of the expectations as a result of this here, we need to ensure that we get support to businesses as quickly as possible. It is clear from any fair reading that this State is far behind when it comes to supporting its SMEs, which could have devastating consequences for those small and medium-sized enterprises and more devastating consequences for the workers who are hoping to return to full employment in these same businesses at a future date.

See this speech in context