Michael Creed (Cork North West, Fine Gael)
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Question 51: To ask the Tánaiste and Minister for Enterprise, Trade and Employment if she has discussions with officials from other Departments with regard to introducing export credit insurance measures to assist the agri-food sector; and if she will make a statement on the matter. [20291/09]

Billy Kelleher (Cork North Central, Fianna Fail)
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Officials from this Department have engaged with their counterparts in other relevant Departments, particularly the Department of Agriculture, Fisheries and Food, the Department of Finance and the Department of the Taoiseach, on the issue of Export Credit Insurance. In addition, the Tánaiste has discussed this matter with the Taoiseach and with her cabinet colleagues.

The position on the possible introduction of a Scheme of State-backed Export Credit Insurance is that following analysis undertaken by Forfás at the Tánaiste's request and, following discussions with her Government colleagues, an accelerated tendering process has been initiated for the purposes of carrying out forensic due diligence on the credit insurance market in Ireland. The due diligence will include an in-depth examination of the client databases of the main credit insurance providers operating in Ireland and will assess the extent of market failure. The level and nature of any such market failure will be quantified. The due diligence will also assess the costs and impacts of possible intervention by the State in this area.

The initial phase of the accelerated tendering process, whereby expressions of interest were invited, has been finalised and completed tenders from the short- listed candidates, for the provision of the forensic examination of the Credit Insurance market have just been received. These tenders are being evaluated today and it is hoped to award a contract shortly. It is intended that the analysis should be completed by early September next.

At that stage, informed by this study, the Government will consider all the issues involved before making a decision on whether or not to progress the possible introduction of a State-backed top-up export credit insurance scheme. Any such decision will need to consider issues such as default risk, exchequer exposure to costs, value for money, the impact of any such scheme on business and exports. These factors will inform any future Government decision on whether to introduce a State-backed top-up export credit insurance scheme.

Export Credit Insurance is just one of a range of measures that companies use as part of their financial model. The Government has taken several initiatives to assist companies faced with credit difficulties. As part of the banks' recapitalisation package, the Government decided to have an independent review of bank lending carried out in order to have an objective assessment of the current lending situation. This process has just been completed and the results of this review will be available very shortly. In addition, the Government has established a Credit Supply Clearing Group with bank, business and State representation. This Group, chaired by the Department of Enterprise, Trade and Employment, is responsible for identifying patterns of events where the flow of credit to viable businesses appears to be blocked and for identifying possible credit supply solutions. In a further recent initiative, the Government has now introduced formal arrangements to reduce the payment period by central Government Departments to their business suppliers, from 30 to 15 calendar days.