Joan Burton (Dublin West, Labour)
Link to this: Individually | In context

Question 206: To ask the Minister for Finance the general and specific powers available to him to guarantee the due repayment by a public limited company of the principal or any moneys borrowed by that company or the payment of interest on such moneys or both the repayment of the principal and the payment of interest; the statutory provisions that are applicable; and if he will make a statement on the matter. [21248/08]

Brian Lenihan Jnr (Dublin West, Fianna Fail)
Link to this: Individually | In context

There are no general powers available to the Minister for Finance to provide guarantees for the borrowings of a public limited company. The State Guarantees Act, 1954 gives the Minister for Finance the power to guarantee the borrowings of bodies which are listed in the Schedule to that act. However, current legal opinion indicates that the mechanism for adding bodies to the Schedule by order may not be in accord with recent court judgements on the need for substantive legislation in such cases.

The Minister for Finance also has powers to guarantee the borrowings of State owned bodies, including state owned public limited companies, where such a power is set out in the relevant Acts of the Oireachtas as, e.g. in section 11 of the Housing Finance Agency Act, 1981. In this context, if the Deputy wishes to establish whether such a power exists in respect of a specific State body, I would be happy to provide the information required.

State guarantees may also be subject to approval by the EU Commission under the Treaty rules on State aid. In recent years State guarantees have been given only in respect of borrowing by the Housing Finance Agency plc and Córas Iompair Éireann both of which have been approved under EC state aid rules.

As at end 2007, the total amount of principle outstanding under State Guarantees stood at €4,498 million of which €4,289 million was in respect of borrowing by the Housing Finance Agency plc. The amounts outstanding under State Guarantees are published annually in the Finance Accounts.