Calleary slams Government inaction on credit crisis
Published on: 02 October 2012
Fianna Fáil Spokesperson on Jobs Dara Calleary has slammed the government for the unacceptable delays in implementing legislation to free up credit for commercially viable small businesses.
Answering questions from Deputy Calleary in the Dáil today, the Jobs Minister Richard Bruton cited ‘technical issues’ and negotiations with banks for the lengthy delays in introducing the Credit Guarantee Scheme, and said the scheme will be launched in the ‘next fortnight’
But Deputy Calleary said many viable small businesses have gone under while the government continues to drag its heels.
“I cannot understand why all of the technical issues to which the Minister referred were not addressed while the scheme was being negotiated. Issues such as training, briefing of the banks and so on should have been addressed in parallel with the legislative process,” Deputy Calleary said.
“While this training, briefing of the banks and so on is under way the reality in terms of lending on the ground is stark, as set out by the Central Bank in its report in September. Gross “new” lending was down one third in the first quarter of 2012 versus the last quarter of 2011. Only Greece has refused more small business loans than Ireland during that quarter, with one in four businesses seeking credit in Ireland being refused in the past six months versus one in 28 in Greece. It is constantly stated that Ireland is not Greece. However, small businesses seeking loans would get an easier hearing in Greece while there is a continual faffing around here in terms of the introduction of the loan guarantee scheme.
“I am incredibly concerned that it is being left to the banks to set the interest rate. Has nothing been learned from the past, that the banks are once again being put in the driving seat of a scheme put in place to guarantee the future of small businesses? I do not need to tell the Minister or his officials that small businesses around this country are creaking at the seams. There is hay rolling down streets for the want of access to finance by businesses.
“Businesses on the ground are not getting finance. If they are, they are getting it at punishing rates and conditions and only in respect of the re-financing of existing working capital. As such, this lending cannot be defined as new. While people are being trained and we are negotiating interest rates, businesses are laying off people and are unable to create jobs or access whatever demand exists.”