THE Government received formal approval from Brussels yesterday to press ahead with its €100 million grant aid scheme for struggling companies — as detailed by Finance Minister Brian Lenihan in last week’s emergency budget.
The new Enterprise Stabilisation Fund — to be overseen by the Department of Enterprise, Trade and Employment and Enterprise Ireland — will grant aid of e500,000 to individual companies that have found themselves hamstrung by the economic downturn and lack of available credit.
The total e100m will cover two years, with e50m being doled out this year and the same in 2010.
“This Irish scheme will help businesses affected by the current credit crunch, without unduly distorting competition,” European Competition Commissioner Neelie Kroes said yesterday while rubber-stamping the scheme.
“The scheme is intended to increase possibilities to give timely and well-targeted aid to SMEs [small and medium-sized enterprises] and large companies and will, therefore, significantly contribute to remedying the current financial and economic crisis.”
In approving the Government’s new fund, the European Commission said that because it is limited in its time frame — only covering this year and next — it does not break EC rules on state aid.
The enterprise stabilisation fund — which will take the form of direct grants, reimbursable grants, interest rate subsidies and subsidised public loans — will only award grants to those companies that were not in financial difficulty before July last year.
“Particular attention will be paid to small and medium-sized enterprises engaged in exporting,” said Mr Lenihan when presenting his proposals last week.
Chambers Ireland has called on the departments of enterprise and finance to avoid lengthy processing delays.
Head of regional development, David Bourke, said timelines for approval “must be shortened if eligible companies are to continue to operate”.
“Chambers around the country are hearing of too many examples of payments by Government being slowed down,” he said.
“At present, having satisfied stringent approval procedures, we understand that enterprise support agencies must then seek approval from the Department of Finance for final draw-down of funding.
“This can take up to three months to be approved by the Department of Finance. This is too long,” he said.
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