Government ‘hoodwinked’ with €12bn credit plan

BUSINESS leaders last night warned the Government was being “hoodwinked” again by banks as ministers outlined a €12 billion credit initiative.

Energy Minister Eamon Ryan said it was payback time for “arrogant banks” as he insisted the new investment initiative would finally provide credit for struggling firms.

The move would see the Government setting targets for the big banks to lend next year and in 2012, with export-led companies being favoured.

However, Mark Fielding of the Irish Small and Medium Enterprises Association (ISME) warned the emphasis would allow banks to “slither” away from their responsibilities and leave regular small firms high and dry as financiers again “hoodwink” ministers.

Fine Gael enterprise spokes- man Richard Bruton also queried the move: “Clearly in all these announcements of bank commitments, the devil is in the detail... It’s no coincidence that this Government announcement comes after the Dáil has gone into recess, which means any deal between the Government and the banks cannot be examined in any detail.”

Finance Minister Brian Lenihan will launch the initiative this week, but Mr Ryan said decisions would be taken on a commercial basis.

“We make money in this country by selling food, tourism, energy, hi-tech services and manufacturing to the rest of the world and we are good at it.

“It’s those areas that have an export element that are the ones that will do best and that’s the business we want to target.

“They’re the ones we want to give support to because that will be the profitable part for the banks,” Mr Ryan told RTÉ.

Mr Ryan said the scheme would lead to a “culture change” in the banking sector as he admitted some institutions had not shown the “right attitude” in their dealings with the National Asset Management Agency.

Meanwhile, Mr Bruton’s replacement as Fine Gael finance spokesman, Michael Noonan, warned NAMA would never make a profit: “The NAMA business plan revealed that only 25% of loans transferred to it are performing, rather than the 40% of loans estimated to perform in its original business plan.

“This means that only one quarter of all property-backed loans in the NAMA-covered institutions in excess of €5m are performing.

“When seen in this way, the task of NAMA is truly enormous and it is virtually impossible for NAMA to be profitable.”


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