Though there is a collective psychosis about most of the State losing Objective 1 status for EU funding, help is on the way in the form of the European Investment Bank (EIB), which provides long-term loans for capital investment and which from January 1st will have 100 billion ecu (£79 billion) in capital reserves to draw on.
This bigger war chest, representing 60 per cent more than what is currently in its coffers, was agreed last June by the bank's shareholders, the 15 EU member-states.
The EIB's president, Sir Brian Unwin, met the Tanaiste, Ms Harney, and the Minister for Finance, Mr McCreevy, last week to discuss future capital investment schemes for public-private partnerships, venture capital funds, small firms and the activities of the Irish banks in what "I call the human capital field - education, training and health".
Sir Brian believes the bank will increasingly be relied on to keep investment funds flowing and that the one billion ecus (£790 million) lent to Ireland in the past four years could be doubled. "Budgets are going to be very tight because of the Maastricht criteria and the Stability Pact. It is quite clear there is not going to be much spare cash," he says.
With the reduction in direct EU funding, public-private partnership (PPP) schemes, common in Britain since the Thatcher revolution, have been identified as a prime method of financing infrastructure projects. The emphasis on private sector involvement is recommended because of the benefits of management, financial and technical skills.
PPP units are currently being established in the Finance, Public Enterprise and Enterprise, Trade and Employment departments comprising civil servants and industry figures.
"We have a lot of experience on that," Sir Brian says. "We are a huge financier of public-private partnerships."
The EIB has changed its focus to the promotion of education and health projects such as the building of universities and hospitals in the context of a policy to tackle unemployment. This forms part of the bank's Amsterdam Special Action Programme (ASAP) which is also aimed at a new "venture capital window" for small and medium-sized enterprises, and a stepping up of existing lending for TENs (Trans-European Network) projects.
In the context of a TENs project, Sir Brian mentions the A55 trunk road being built to Holyhead in Wales, "clearly of immense importance to Ireland". "Whatever the benefits in the longer term, the rigours of EMU and the Stability Pact will be less politically and socially tolerable unless we can reduce the still obscenely high level of unemployment in the EU - over 17 million out of work, of whom five million are young people," Sir Brian says.
The EIB has helped to finance the Dublin-Belfast rail and road link and the gas interconnector with the British network. Ironically, the effect of economic success has accelerated the wear and tear of what would hitherto have been regarded as acceptable infrastructure.
"You are going to have to harness a different share of finance from public and private sources to provide the platform for sustained economic growth," Sir Brian says.
According to Mr Richard Power, head of the EIB division with responsibility for Ireland, loans of up to 50 per cent of the cost of infrastructure projects can typically be provided by the EIB. He says loans could be extended for the funding of such projects as the Port Tunnel, the Dublin Bay sewerage scheme and the Luas urban rail scheme.
Roads, waste disposal and water service projects are also ones which the private sector is viewing as viable for investing in.
"We are ready to help in the process. As IBEC and others have pointed out, there does seem to be a need for this development on a reasonably large scale and on a reasonably fast timeframe in order to address the emerging financial gap that is arising," he said.
