Speech by Minister Paschal Donohoe, TD 2018 European Investment Bank and Department of Finance “Investing for the Future” Conference

Thursday 6th December 2018

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Speech by Minister Paschal Donohoe, TD

2018 European Investment Bank and Department of Finance “Investing for the Future” Conference

 

Good morning ladies and gentlemen.

 

You are all very welcome to today’s conference on “Investing for the Future”.

 

This event was organised by my department and the European Investment Bank and is very kindly hosted by Governor Lane and his colleagues at the Central Bank of Ireland.

 

I would like to start by welcoming EIB Vice President Andrew McDowell.

 

our own director of the EIB, Des Carville;

 

and Cormac Murphy who heads up the Dublin office.

 

President Hoyer is travelling to Ireland for this event and I am looking forward to discussing Ireland’s very successful and positive engagement with the bank with him when we meet later this evening.

 

I would also like to thank all the other officials who have travelled from the EIB’s head office in Luxembourg to be with us today and tomorrow.

 

We are now at a stage when we need to secure additional EIB funding for areas outside the traditional areas of engagement.  This is particularly true in relation to private sector engagement.

In this regard, today’s conference promises many interesting panel discussions on topics which I hope you will find interesting, engaging and topical.

 

They are relevant to you, the bank as a lender and the Government as policy priorities.

 

There are three things I hope you take away from today:

 

The first takeaway is a greater understanding of the scale and breadth of the EIB and to appreciate how it can benefit member states;

 

Secondly a greater insight into what the Government and the State are doing to assist industry in the key areas covered by the panel discussion today;

 

I will leave the third and final mystery takeaway until the very end of my address.

 

First Takeaway – Benefits of EU membership and the EIB

Let us start with reminding ourselves what the EIB is and what it represents.

 

It has been at the centre of Europe since being established by the Treaty of Rome in 1958 and it celebrated its sixtieth anniversary this year.

 

It is the world’s largest international public lending institution and has been active in Ireland for 45 years.

 

Furthermore access to its funding and expertise is one of the many benefits of our membership of the European Union.

 

Just to touch on this latter point first: In these times it is important that we acknowledge and appreciate the broad range of benefits our membership of the EU bestows.

 

And I am glad to see recent research indicates that the citizens of Europe see and appreciate how membership of the EU benefits them.

 

The most recent Eurobarometer survey of approximately. 28,000 people across 28 Member States showed that almost two thirds of citizens believed that their country benefitted from membership of the EU.

 

This is the highest score ever measured since 1983.

 

What was very notable from an Irish perspective was that this figure rose to 81% in terms of Irish respondents.

 

This was the second highest score[1] in the EU 28 and is consistent with many other polls which demonstrate that we are resolutely pro-European.

 

We have been and continue to be committed Europeans. This is never truer than the present moment given the current developments in relation to Brexit.  While we do not support the withdrawal of the UK from the EU, we do acknowledge the outcome of the Referendum and, as you know, we are working very closely with our EU and UK colleagues to ensure that the impact will be minimalised on all of our people and businesses.  Regardless of Brexit, Ireland’s future is very much in Europe and with the EU. 

 

We know that we have benefitted from EU membership in a wide variety of ways. Some of these benefits can be intangible such as the peace and stability in Europe.

 

But it is important to celebrate tangible benefits such as the EIB, which directs 90% of its activity towards EU member states.

 

The EIB is the largest multilateral financing institution in the world with a Triple A rating from the top three rating agencies.

 

To give you a sense of scale, its balance sheet had loans outstanding of over €450 billion at the end of 2017 and current lending activity is approximately €60 billion per annum.

 

It has lent over €1.3 trillion over its life.

 

Since Ireland joined the EC in 1973, the bank has supported 449 Irish projects to the tune of €17 billion.

 

Some of its first Irish projects in 1973 included companies such as Irish Sugar, IAWS, CIE and Golden Vale.

 

The largest project here to date was €490 million for the National Children’s Hospital. The economic and social impact of such support and commitment shown by the EIB to Ireland is clear.

 

The EIB Group, which is comprised of the bank and the European Investment Fund, lent just over €1bn in Ireland in 2017 and is on track to achieve a similar figure this year.   I would like to congratulate and thank everyone who was involved in helping us achieve this goal both in Ireland and in Luxembourg.  

 

Last week the EIB announced €30m investment into Dublin based biotech pioneers Nuritas.

 

You will hear some fascinating case studies throughout the day including innovative agri-tech company Devenish Nutrition.

 

These are new areas of activity for the EIB in Ireland and demonstrate the breadth of products which the bank offers.

 

President Hoyer and Vice President McDowell will be signing tomorrow a Gas Networks Ireland project and there are also other signings today and tomorrow involving renewable energy and the future BREXIT loan Guarantee scheme.

 

The range across these examples clearly shows the widening and deepening of the Ireland/EIB relationship over recent years and the level of shared imagination and ambition between us.  I look forward to further new areas for the future. 

 

Alliances are very important in Europe, especially for smaller countries such as Ireland, and the EIB is no different.

 

EU Member States are in nine shareholder groupings called constituencies. Each constituency has its own Vice President at the bank.

 

Whilst large European countries like Germany and France have their own constituencies, smaller countries are joined together into a number of group constituencies.

 

We are in a constituency along with Denmark, Romania and Greece. When you think of it, it is actually a very diverse yet a very representative group with a Nordic, an eastern country, a southern country and an island.

 

Our constituency’s right to appoint a Vice President is shared equally amongst the four countries. Currently we hold the vice-presidency, which is very capably held by Andrew McDowell who you will hear from shortly.

 

Our director, Des Carville, sits on the board,  the Risk Policy Committee and is an alternate member of two other board committees.

 

We have a dedicated team within my Department which deals with policy matters regarding the bank and supports our director and myself in my capacity as a Governor of the bank.

 

The bank opened a Dublin office, headed by Cormac Murphy, in 2016. It will relocate from Mount Street to the NTMA’s new offices on North Wall Quay next year.

 

The bank employs over 90 Irish nationals in its workforce of over 3,000 including its Head of Legal and Head of Internal Audit.

 

So our dedication to, involvement with and belief in the EIB has never been higher.

 

Second Takeaway – Government Action

 

The second takeaway, is to hopefully come away with a better understanding of what the Irish Government and State are doing through the various departments and agencies to assist industry in the key areas covered by today’s panel discussions. 

 

Housing is a top priority for this Government.

 

My colleague Minister Murphy will be talking this morning along with representatives from two new dedicated agencies created to address the housing shortage; Home Building Finance Ireland and the Land Development Agency.

 

I am delighted to have announced this morning that the legislation for Home Building Finance Ireland was signed by the President earlier this week so I expect it to commence its lending activity early in the New Year.

 

Minister Bruton will speak about his intention to make Ireland a leader in tackling climate change and the need for the private sector to play a key role in achieving this.  

 

Just before your lunch in the Central Bank’s Exhibition Centre, my colleague Minister D’Arcy will discuss Ireland’s recent Green Bond which highlights our ambitions for building a sustainable, low carbon society through sustainable finance.

 

After lunch, I am delighted to see that the Funding for Growth Panel will include representatives from the Credit Union sector, which my Department has policy responsibility for, and the SBCI as it is a body under the aegis of my Department. 

 

Finally, just before EIB President Hoyer’s closing remarks you will be joined by my colleague Minister McEntee to give you a perspective on Brexit and the EU post Brexit. 

 

So in the issues that matter to you, the Irish Government is proactive and engaged.

 

Final Takeaway – networking

The third and final takeaway really is no mystery – it is an action point.

 

Today is as much as anything a networking event. I hope you will be able to stay for the day and network over lunch, the coffee breaks and the drinks reception later.

 

This is a great opportunity to renew or make new connections with the bank through Werner, Andrew, Des and Cormac and their colleagues throughout the day.

 

Hopefully you will be better informed about the bank and what it offers and can find a way to tap into its resources for your companies or for your client companies.

 

Before I hand over to Andrew, I would just like to once again thank Governor Lane and his staff in the Central Bank for the kind use of their facilities today.

 

ENDS

 

[1] LU was highest at 85%; CZ was lowest at 34%; HR 36%; IT 39%