Mairead Farrell (Galway West, Sinn Fein) | Oireachtas source

The provisions of this Bill which are designed to allow Ireland to access the various European funding supports are welcome but questions remain on whether they go far enough, how they will be utilised and to what end. According to the OECD, average employment will remain below pre-crisis levels by the end of 2021, which is the date the initial investment period of the pan-European guarantee fund ends, after which time any extension will need to be approved by the contributors. I have concerns that were this extension to need unanimous approval at a period when the crisis could be at its height, it could become the subject of a political battle among member states at the worst possible time and thus be dead in the water. We should not forget the turmoil of the past decade over whether the eurozone itself would survive. We need to remember that this affects people's lives. Come December 2021, if the OECD's unemployment predictions prove to be correct, and I fear they may be overly optimistic, there will be people standing at the edge of the cliff not knowing what the future holds.

We should be clear that the host of measures contained in this package, while welcome, are at best a workaround. The proposals for eurobonds and the mutualisation of debt still represent the best way out of this quagmire and the European Stability Mechanism remains highly unpopular among member states due to all the conditional structural reforms it entails, which is code for fiscal austerity and a recipe for economic disaster.

The European Investment Bank's pan-European guarantee fund will provide working capital to SMEs, which my party believes need to be supported during the crisis as they are the backbone of our economy. For instance, rural Connemara will suffer considerably due to lack of tourism. We need to ensure that the small and medium-sized businesses can get the funds they need to ride out the storm of the Covid crisis and ensure that they can survive and continue to provide jobs in their locality.

For mid-caps and corporates that are deemed viable in the long term but are struggling due to the economic impact of the Covid-19 pandemic, the guarantee fund will also make funds available. For these companies receiving funds, the way for the State to optimise its return should be through loans that are convertible to equity for the successful firms, while making provisions which allow these firms to buy these shares back at a later date. All talk of fiscal prudence which does not seek to maximise the return to the State is just that; talk.

It is also worth highlighting that the pan-European guarantee fund allows for 7% of its funds to be allocated to venture capitalists and private equity. Given private equity's often poor track record of saddling companies with debt, stripping their assets, raiding their pension funds and then laying off their employees, what mechanisms will be put in place to ensure that this does not happen? From my perspective, we need to ensure that this funding goes to small and medium-sized enterprises.

The SURE scheme temporary support to mitigate unemployment risk is to be welcomed as it seeks to save jobs, and as we know from the previous crisis, a failure to protect jobs is a failure to protect people's livelihood and a sure-fire way to exacerbate economic inequality. Nevertheless, it mandates that every member state contributes to the guarantee in proportion to its relative share in the total gross national income of the Union. As a result, it is estimated that we will be putting €483 million into this scheme. As has now been well documented, GNI is a poor measure of the health of the Irish economy - something that has even been acknowledged by the Central Statistics Office which has constructed its own modified GNI measure which attempts to remove distortion from profit-shifting. Unfortunately, for Ireland, the latter measure is not used internationally, meaning the standard over-inflated GNI measure will be utilised and Ireland is likely to contribute more and potentially receive less funding due to the inaccurate picture of the economy. I hope the Minister will raise that with his European counterparts.

In closing, I wish to raise two general concerns. First, there is a likely reluctance on the part of the Government to draw down as much funds as possible due to its conservative ideological bias, which runs the risk of not providing enough investment to counteract the downturn. In other words, the risk is that we do too little rather than too much. Second, the more market-friendly approach that this Government will take means that these de facto State subsidies could be used to support the private sector's interest at the expense of public enterprise. We should not forget the crises in housing, education and the healthcare sector. These are the front-line staff who we were quick to clap but slow to reward. We should be clear that what these funds constitute is massive State subsidies to Europe's private sector. Following the previous crisis, as the public sector was forced to bail out the financial sector, that same sector then turned around and told us that the large public debts and deficits were evidence that we were living beyond our means. This has accurately been described as the biggest bait-and-switch in history. Today, European states will not be bailing out the financial sector, but in many cases the wider corporate sector. I would certainly hope that many of these corporates will remember that in a few years' time when the austerians come calling.

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