Patrick O'Donovan (Limerick County, Fine Gael) | Oireachtas source

Unfortunately, I cannot accept Deputy Doherty's first amendment. We had a discussion during the interruption. Article 11 of the SURE regulation states that member states' guarantees must be irrevocable, unconditional and on demand. The proposed amendment would in effect make the SURE guarantee agreement signed by Ireland a conditional rather than an unconditional one, as is required. It would have the effect of pricing additional risk into the borrowings the European Commission seeks in the market, making the cost of borrowing higher and defeating the purpose of the instrument, that is, to make loans available to pandemic-hit members states and to support their citizens. On receipt of a demand notice from the Commission under the SURE guarantee, guarantors, including Ireland, will have a maximum of ten business days to make payments. In passing the legislation, the Oireachtas will accept this stringent timescale, which was agreed after lengthy negotiation between the member states and the Commission. Should a demand be made, for example, during a period of Dáil recess, it would be impossible to comply with the provisions of the guarantee if the amendment were agreed to. In the case of the SURE guarantee, failure to meet the timeframe for payment under the guarantee would put Ireland in a technical sovereign default.

To respond to the point Deputy Bríd Smith raised, tomorrow's European Council meeting will focus exactly on what she has referred to, that is, the balance between grants and loans and how that will play into the multi-annual financial framework, which will be the European Union's budget for the coming years.

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