Michael Lowry (Tipperary North, Independent)
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Question 368: To ask the Minister for Enterprise, Trade and Employment his views on the recently approved EU Commission Regional Aid map for Ireland; the effects this map will have on north Tipperary; his further views on whether the approval further degrades the emphasis placed on north Tipperary as an attractive location by the job creation agencies; and if he will make a statement on the matter. [36169/06]

Micheál Martin (Cork South Central, Fianna Fail)
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Given Ireland's economic performance since the current Regional Aid Map was approved by the European Commission in 1999, it was to be expected that our scope to designate areas for regional aid for 2007-2013 would be significantly reduced. The European Commission initially proposed that only the Border, Midlands and West Region, representing 26.5% of the country's population, would be designated for regional aid for 2007-2013. However, Ireland successfully negotiated scope to designate areas covering 50% of the population.

In selecting the areas within the Southern and Eastern Region which could, in addition to the BMW Region, be designated for the new regional aid map, Ireland had to observe a strict EU requirement that the areas selected be relatively more in need of economic development. Accordingly, I consulted the Southern & Eastern Regional Assembly for their views. The Assembly accepted the findings of an independent report, which it commissioned, from the National Institute for Spatial and Regional Analysis, at NUI Maynooth. The Assembly's proposals were included in the proposed Regional Aid Map which the European Commission has now approved.

Under the new map, North Tipperary will retain entitlement to regional aid from 2007-2013. The maximum aid rates will be 30% for small firms and 20% for medium-sized firms. Large firms will permitted an aid rate of 10% until end 2008. Apart from the BMW region, no other part of Ireland will be permitted higher aid rates during these periods. While I am satisfied that North Tipperary, and Ireland as a whole, has achieved a very good outcome under the Regional Aid Map for 2007-2013, the role of regional aid in attracting foreign investment should not be exaggerated. Such globally significant decisions are founded on a variety of elements. Factors such as the availability of skilled labour, modern infrastructure and a flexible regulatory environment are of fundamental importance to potential investors. IDA Ireland is constantly innovating by adapting and changing the value proposition it offers its clients. This means exploring new areas and strategies, improving Ireland's physical and digital infrastructure and, most importantly, investing in people through education and, in particular, research funding. IDA Ireland remains committed to regional development as a core part of its strategy and is constantly working with relevant national and local partners to develop and build the infrastructure necessary to make regional locations attractive for international business.

I would also like to point out that, regardless of the Regional Aid Map, all parts of Ireland will continue to enjoy potentially significant financial supports for research and development and training initiatives. They will also remain eligible for a range of non-financial supports. All such supports are designed to drive on-going company growth by ensuring success in overseas markets, increased competitiveness and productivity and enhanced R&D and innovative capabilities. These are the factors which will drive company success and ultimately ensure overall job creation.