Saturday 20 January 2018

Howlin hopeful of securing new EU stimulus package

Brendan Howlin
Brendan Howlin

Laura Noonan in Brussels

GOVERNMENT ministers made the case for more cash for Ireland in Brussels yesterday amid expectations that European leaders will agree within weeks to release funds for some sort of stimulus package.

Public Expenditure Minister Brendan Howlin pushed for Ireland to get more money from the European Investment Bank (EIB) and from the EU's structural funds during meetings with the EIB yesterday.

Mr Howlin also met officials from the EU's Irish bailout team and argued that half the money from the €3bn due to be raised from the sale of semi-state assets should be used "directly" for jobs projects. He wants the rest set aside in a "support account" to make it easier for Ireland to get private companies to co-invest in EIB projects.

The Government has pledged to privatise assets but has yet to raise a cent from sales. Mr Howlin said the EC/ECB/IMF troika hadn't "signed off on" the plans to use more of the privatisation proceeds to support job creation, but said the Government had "very clear understandings" of support.

The efforts came as European policymakers rushed to embrace the "growth agenda" advocated first by France's new president Francois Hollande and more recently by ECB chief Mario Draghi and Commission boss Jose Manuel Barroso.

As well as using EIB money to start additional projects, the Government is also hoping the EIB will "take over" some of the funding of the existing €17bn of Ireland's capital programme, a measure that Mr Howlin said would improve Ireland's "debt sustainability".

The key to this is ensuring that much of the EIB loans are not added to the national debt.

Finance Minister Michael Noonan, who was also in Brussels yesterday, said the 'off-balance sheet' hope was "realistic".

Mr Howlin and his officials also argued that tens of billions of unspent EU structural fund cash should be allocated by "competition" in a way that would favour countries with a good track record of using the funding such as Ireland.

"We made good progress on all fronts," Mr Howlin told reporters. He expected the first funding to be granted later this year, for projects that could also be started later this year.

Both ministers declined to say how much funding they had sought, but Mr Howlin said they were hoping to restart "billions of euro" worth of projects while Mr Noonan said he'd "take whatever we can get" as long as it was not included in the national debt.

The ministers also declined to detail particular projects they had in mind. Mr Howlin said investment would go to projects such as schools, roads and primary healthcare centres that "feed into economic growth and have an immediate impact in terms of employment".

It is understood that a "wish list" was submitted to EC and EIB officials.

A meeting of EU leaders next week may agree to increase the EIB's own capital by €10bn after the EIB's boss yesterday joined Mr Barroso in calling for a capital increase.

That increase would cost Ireland an extra €57m (as its share of the investment) but would make it easier for Ireland to get more EIB support.

Projects at the EIB are decided on a case-by-case basis. The EC may decide on the allocation of structural funds over the summer.

Mr Howlin also insisted that the Greek crisis would not derail the Government's privatisation plans. "There is significant market interest," adding that the first asset would be brought to market next year and would most likely be Bord Gais Energy.

Irish Independent

Promoted Links

Business Newsletter

Read the leading stories from the world of Business.

Promoted Links

Also in Business