DAIL QUESTION NO. 67
To ask the Tánaiste and Minister for Enterprise, Trade and Employment further to an adjournment debate of 24 February 2009 regarding the provision of export credit insurance to Irish exporting businesses, the progress which has been made; and if she will make a statement on the matter. – David Stanton.
For ORAL answer on Wednesday, 1st April, 2009. Ref No: 13409/09
R E P L Y
Tánaiste and Minister for Enterprise, Trade and Employment (Ms. Coughlan)
It is recognised that there has been some withdrawal and reduction of export credit insurance cover for business, including companies in the food sector, by the commercial insurance companies, in recent months.
In relation to the possible introduction of a State Export Credit Insurance scheme as a response to this situation, I recently requested that a review of the export credit insurance market be carried out by Forfas and Enterprise Ireland. This report has just been finalised and I will be bringing its findings to Government shortly for discussion.
Having regard to the continued concerns of the business community in relation to the issue of credit generally, an independent study on credit availability has been commissioned by the Department of Finance, as part of the bank recapitalisation programme. I understand that this study, which will also address the issue of credit insurance and trade finance generally, is due to be completed shortly.
In light of the findings of the two studies mentioned above, the Government will be considering the facts and possible policy responses to these particular issues within the next few weeks. It should be appreciated that any intervention by the State in the area of trade finance must have regard to its effectiveness and tangible benefits for exporters and businesses generally, in light of potential significant additional costs and financial exposure to the exchequer.
I would also like to point out that, contrary to reports, while some Member States operate medium to long-term schemes which generally cover large–scale capital or infrastructural projects, none have introduced state-backed, short-term, export credit insurance, similar to what is being requested for Irish exporters. The recently developed French scheme covers the domestic French market only and does not cover exports at all. A possible UK scheme is still under consideration. Only Denmark has advanced proposals that will cover exports and these proposals have been submitted to the EU Commission for approval.