Arthur Morgan (Louth, Sinn Fein)
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Question 93: To ask the Tánaiste and Minister for Enterprise, Trade and Employment her plans to introduce an export focused short-term State supported credit insurance scheme to supplement the capacity of the existing commercial insurance market; if her attention has been drawn to the fact that the lack of State supported export credit insurance is inhibiting business, especially small and medium enterprises from expanding into export orientated activities; and if she will make a statement on the matter. [40765/09]

Mary Coughlan (Donegal South West, Fianna Fail)
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As a result of the difficulties being experienced by some companies seeking Export Credit Insurance, I arranged that a forensic examination of the Export Credit Insurance market in Ireland should be carried out to establish what assistance the State could provide in enabling exporters and to assist recovery in the credit insurance market.

This Assessment, by international consultants KPMG, who also advise the UK Government on credit insurance issues, was completed just recently. The study analysed a significant level of confidential and detailed company-specific information from the credit insurers. It was established that only a very small level of Irish exports are insured, that the existing cover is heavily concentrated on a single sector and a single market, that total withdrawals of cover (i.e. where the market decides that the risk is too great to provide any level of cover) are much more prevalent that reductions, that the introduction of a State 'Top –up' scheme, as has been sought for such reductions, would be expensive and of very limited impact, and that a negligible number of jobs would be supported by such an initiative. Significantly, the level of premia to be paid by companies under any such scheme, would, under EU State-Aid rules, be a multiple of regular premia and therefore very expensive for business. In addition, it was established that there are indications that this market is showing signs of recovery and that the insurance companies should therefore begin to provide better levels of cover.

The Cabinet Committee on Economic Renewal and the Government considered this issue earlier this month and, based on the overwhelming weight of evidence in the KPMG report, decided that a State-supported scheme of short-term export credit insurance should not be introduced. However it was also decided, as suggested by the KPMG report, that my Department should actively considering the merits of introducing a State supported Medium-term Export Credit Insurance Scheme (where the risk period is over 2 years), as part of their forthcoming Action Plan on Trade, Investment and Tourism.