Written answers

Tuesday, 22 November 2016

Department of Finance

European Fund for Strategic Investments

Photo of Dara CallearyDara Calleary (Mayo, Fianna Fail)
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164. To ask the Minister for Finance the total financial contribution of the State to the European Fund for Strategic Investments; and if he will make a statement on the matter. [36082/16]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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I take it that the Deputy is referring to the provision under Article 4 of the current Regulation for the European Fund for Strategic Investments (EFSI) dealing with the Terms of the interinstitutional EFSI Agreement between the European Commission and the European Investment Bank implementing EFSI. 

While supporting the right of Member States to make contributions to EFSI in the form of guarantees or cash, Ireland has not made any such contributions itself. It is also important to recall that the announcements made by a number of Member States including Germany, Italy, France and Spain in the lead up to the original agreement on EFSI were to do with co-financing through their National Promotional Banks (NPBs).  Making such contributions to the overall EFSI fund is not ruled out either directly or through a co-funding programme through our own NPB, the Strategic Banking Corporation of Ireland (SBCI).  However, in the context of very constrained public finances and in the near aftermath of exiting the EU/IMF programme, such contributions would require strong justification in terms of supporting projects that would benefit Ireland directly.

EFSI provides an important additional funding mechanism to support investment in the pursuit of employment and growth. It must be considered alongside the other suite of investment mechanisms including the European Investment Bank's normal lending activities.  Thankfully in the case of the public sector, the State's capital investment programme is sufficiently funded via the state's borrowings through the NTMA, while other mechanisms such as PPPs and off-balance sheet vehicles are also additional potential options for funding investment.

Since inception, Ireland has seen the main potential beneficiaries of EFSI as being in the private sector including entities such as PPP companies and I am pleased that the primary health care centres PPP has successfully drawn down EFSI funds.  It should be remembered that each EFSI loan entered into by the State would pre-commit funding for the repayment of such loans, and would have to be considered in the context of the expenditure benchmark under the EU's fiscal rules.  This has been a significant limiting factor on the potential for EFSI funded public sector projects to date.

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