Joan Burton (Dublin West, Labour)
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Question 69: To ask the Tánaiste and Minister for Enterprise, Trade and Employment the proposals under development in her Department to establish a State-backed export credit insurance scheme; and if she will make a statement on the matter. [6367/09]

Mary Coughlan (Donegal South West, Fianna Fail)
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Since the State withdrew from the provision of Export Credit Insurance in 1998, exporters have been able to avail of such insurance on the open market, as commercial operators made such cover easily available and there was significant take-up of policies by exporters. However, it would appear that over recent months there is evidence that insurers have been reducing or withdrawing cover and it would appear that there has therefore been some market failure in this sector. Over the past number of weeks, this lack of affordable credit insurance, including export credit insurance, has been strongly highlighted by exporters as a significant problem and business groups have requested that the State assist in the provision of such insurance cover.

I am naturally concerned that exporters are finding it more difficult to secure insurance and while the concept of State support may be warranted, it is very important in the current difficult financial environment, that we first of all establish the facts of the matter by engaging with all key stakeholders, including the insurance providers, before committing the State to taking any initiatives in this regard. In bringing forward any proposals in this area, it is important that the State is not left exposed to unacceptably high risk. A key requirement would be that any State initiative would be designed to be self-financing and time limited, and also that there would be a financial cap, to limit the exposure of the State, in the event of significant losses developing. In order to properly assess what is a very complex issue, I have asked Forfas and Enterprise Ireland to expedite an analysis of the situation and my Department is working closely with them on this research. They will be reporting back to me by the end of this month.

I should point out that this particular problem is not unique to Ireland. The underlying reasons are linked to the global financial crisis and the lack of credit generally available. Other EU Member States are facing similar problems and we have been engaging with them and with the European Commission, with a view to helping our understanding of the issues so that we can develop a fast and informed response. I would like to ensure the Deputy that we are working quickly and thoroughly to establish the facts and set out the options. I intend to bring this matter to the Cabinet as a priority, once I have received and considered the report being prepared for me.