asked the Minister for Finance if he is aware of the difficulties that the EC Directives on Freedom of Services will pose for the banks, building societies and other financial institutions; the impact this directive will have on these institutions; and the steps he proposes to minimise the likely problems arising.

The only EC Directive on Freedom of Services in banking and other financial institutions of which I am aware is a draft directive on the freedom of establishment and the freedom to supply services in the field of mortgage credit. This has yet to be considered by the Council of Ministers.

The Deputy may have in mind the document, "Completing the Internal Market", a White Paper from the Commission to the European Council, issued in June 1985. In that document the Commission set down detailed proposals for the removal of barriers to the achievement of a single market by 1992, including the free provision of banking and other financial services. The detailed measures would be implemented by means of Council Directives, one of which is the draft proposal on mortgage credit, to which I have already referred. We will participate fully in the consideration of all such proposals in the Council when and if they arrive.

I do not consider that the EC proposals will pose major problems for Irish banks. The banking sector have become increasingly inter-nationalised and Irish banks are already competing with their foreign counterparts.

With regard to building societies, the Minister for the Environment issued in April last a discussion document on the future legislative and regulatory arrangements for that sector. In that document it was recognised that the Commission's proposals on mortgage credit will effectively alter the competitive environment. When the societies and other interested parties have submitted their comments on the document, the Government will propose the necessary legislative changes to enable the societies to compete in the new environment, which will present them with opportunities as well as challenges.

It was, in fact, the Freedom of Services Directive I was referring to. While that has not yet been cleared by the Commission I am seeking the Minister's assistance in looking for a derogation of the implementation of that directive for some years.

Is this the one on mortgage credit?

No, it is the Freedom of Services Directive.

The White Paper?

Yes, this is the one that is in formulation.

That is not a directive.

It is not a directive yet, but when it becomes a directive it will be mandatory on us to implement it in national legislation. I am hoping that the Minister might be in a position to seek a derogation or a stalling effect on that for the following reason. Is the Minister aware that some 6,000 employees currently employed in the insurance industry would be under considerable threat — in fact, it would have a disadvantage for the Minister's Exchequer funding also — in that the premiums of policyholders in so far as insurance is concerned have to be invested in the economy. If the Freedom of Services Directive becomes operable, then there will be no requirement on companies setting up here to maintain investment.

Is the Deputy referring to the second non-life directive?

No. We already have the freedom of establishment since 1976 which caused such great confusion in the industry and which has caused much difficulty in so far as premium control is concerned. The Freedom of Services Directive is coming up shortly which will allow any insurance company or any other financial institution to set up business here without even maintaining an office here, let alone maintaining investment income here. I am seeking the Minister's support in having this matter stalled for sufficient time until our insurance industry, and in particular the building society industry, can come to grips with what will be a very difficult time for them.

I think the Deputy and I may be talking at cross purposes. I do not answer for directives concerning insurance. That is a matter for the Minister for Industry and Commerce. I answered the Deputy's question as it affects those matters which come within my own sphere of responsibility. I am not in a position to deal with policy in regard to directives affecting insurance. Rather than attempt to give the Deputy an answer which might be partial and misleading, it would be better if I did not reply at all.

The question was put to the Minister's colleague but was transferred to the Department of Finance.

The question was very widely phrased.

It is the only way to get the Minister into the House for cross-examination.

That is what Question Time is all about.

Would the Minister make representations to this colleague on the upcoming directive on the freedom of services which will have a big bearing on financial institutions setting up here and will not require them to maintain investment income or premium income in this economy? It will lead to a withdrawal of funds which might be necessary for Exchequer demands. I would seek time in the preparation of such a directive. That can only be done by the Minister seeking a derogation at EC level so that we can have time to adjust and bring our financial institutions and administrative positions into focus.

I will convey what the Deputy said to the Minister. I am sure he will take close account of it. I will not make any further comment.