Cowen ‘out of touch with business credit problems’
Labour leader Eamon Gilmore told the Dáil more than €33 billion of taxpayers’ money had thus far been committed to rescuing the banks, including €22bn for Anglo, which, by the Taoiseach’s own admission, will never be recovered.
Mr Gilmore said it had been a condition of that state bailout that the banks would begin lending again to businesses “so that jobs could be sustained and people taken back to work”.
But this clearly hadn’t happened, he said, pointing to a recent survey published by the Irish Small and Medium Enterprises Association.
According to that survey, 55% of small and medium-sized businesses have been refused credit in the past three months. By doing so, the banks were putting thousands of businesses and their employees at risk, Mr Gilmore added.
“[The ISME report] describes the actions of the bankers as giving a ‘two-fingered response’ to Government policy and it calls for an investigation by the Central Bank into SME lending by the banks,” he said.
In response, Mr Cowen said the aim of Government policy was to return the banks to a position where they could access funds and lend these onto viable businesses and households.
This was particularly true in the case of AIB and Bank of Ireland, he said, “which continue to service the country and their clients”.
Mr Gilmore said the Taoiseach was oblivious to what was actually happening in the banks. “With the greatest of respect, Taoiseach, you’re totally out of touch with what is happening in the country and the reality of what happens when a business goes into a bank to look for credit.”
Businesses were being “sent packing with a flea in their ear” before even submitting a formal credit application.
“They’re told not to bother; they’re told to go away,” Mr Gilmore said.
Mr Cowen said the Government had made it clear to AIB and BOI that they would each have to provide €3bn in extra credit for SMEs this year and next.
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