Thomas Byrne (Fianna Fail) | Oireachtas source

The purpose of this Adjournment matter is to get some clarification from the Government on the proposed role of the KfW bank, a German bank which the Taoiseach mentioned in his speech announcing that the Government would not seek a so-called backstop financial arrangement upon leaving the agreement with the troika and the Commission. KfW is a public interest bank with various roles in Germany and beyond. The Taoiseach gave scant detail when he said that it would be of assistance to the Irish economy, including granting finance to small and medium enterprises, SMEs. This led one commentator to speculate wildly that it could be a backstop for the Irish Government and its sovereign debt requirements. It is accepted that will not happen but the lack of detail has allowed that type of speculation to grow. I want confirmation that this will not happen because the person who made the allegation in one of the national newspapers could well have read the Taoiseach's speech as giving that role to KfW.

We want to know several things about KfW. Is it applying for a banking licence in Ireland? Will it operate on the high-street insofar as there are high street banking services for SMEs? Has the Government drawn up a memorandum of understanding with the German Government? KfW is mainly owned by the federal government and partly by the states in Germany. Does the Minister for Finance have a memorandum of understanding with the bank or with its chairperson who is the German Minister for Finance? What is the expected level of credit that KfW will make available for Irish business and will it lend directly into business in Ireland or will it provide finance to the banks to then provide finance to business? Is there any guarantee that the finance will come out of the banking system? We have had bad experiences over the past few years in that regard and in regard to lending targets. Will KfW compete with the banks or will it fund them?

When the Labour Party proposed a strategic investment bank in the last Dáil - and it is in the programme for Government - KfW was mentioned as an example of what could happen in Ireland. Will this bank complement the proposal in the programme for Government for a strategic investment bank or is it in fact the strategic investment bank? I look forward to the Minister of State's reply.