Written answers

Tuesday, 9 June 2020

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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66. To ask the Minister for Finance the role of Ireland in relation to the support to mitigate unemployment risks in an emergency scheme proposed by the European Commission; if legislation is required here in order to put the scheme into effect; when such legislation is needed; and if he will make a statement on the matter. [10197/20]

Photo of Paschal DonohoePaschal Donohoe (Dublin Central, Fine Gael)
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The Support to mitigate Unemployment Risks in an Emergency (SURE) instrument is intended primarily to support Member States with efforts to protect workers and jobs, and also support some health-related measures.

Under the proposal, SURE will provide financial assistance to Member States of up to €100 billion in total. The Commission will borrow on financial markets to finance the loans to Member States at the same interest rate, allowing Member States benefit from the EU’s strong credit rating and low borrowing costs. The loans are targeted to assist Member States to address sudden increases in public expenditure caused by the Covid-19 pandemic, in order to preserve employment (such as short-time work schemes and other similar measures put in place for the self-employed) and certain health expenditure.

SURE would come with safeguards to ensure fair and equitable access to funding for Member States, with no more than €60 billion available to any three Member States, under the proposal.

The loans will be underpinned by a system of voluntary guarantees from Member States. For a lending volume of €100 billion under the SURE instrument, €25 billion in guarantee commitments are required from all Member States collectively. This guarantee mechanism ensures Member States do not have to pay any money upfront. The instrument would not become available until all Member States sign up to their guarantee amount, and these commitments would remain in place for the full term of the loans which they are underwriting.

Each Member State contributes to the guarantee in proportion to its relative share in the total Gross National Income of the Union. For Ireland, this would be equivalent to €483 million (1.9% of EU-27 GNI).

SURE was adopted by ECOFIN Finance Ministers and published in the Official Journal on 19 May 2020. While the instrument is a regulation, which will have direct applicability in Irish law, signing the voluntary guarantee agreement, will require enabling legislation in Ireland. This requirement stems from Article 11 of the Constitution which provides that all the revenues of the State “shall be appropriated for the purposes and in the manner and subject to the charges and liabilities determined and imposed by law”. As no Member State can access SURE funding until all Member States have signed the voluntary guarantee, the timeline for introduction of legislation is urgent. The Government have decided to commence drafting legislation on this matter with a view to publishing a Bill as soon as possible.

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