Business Irish

Wednesday 21 November 2018

German Finance Minister Wolfgang Schaeuble: 'Germany jealous of Irish growth figures'

Schaeuble in Dublin to launch €800m bank designed to boost SME lending

Ailish O'Hora and Colm Kelpie

GERMAN Finance Minister Wolfgang Schaeuble said today that Germany is "jealous" of Ireland's growth figures.

He was speaking in Dublin's Farmleigh at the launch of a new €800m Europe and Germany-backed State bank designed to boost SME lending.

Irish GDP growth could be 5pc or more this year, most economists believe as bounce back from the recession.

Mr Schaeuble also said Ireland had made a huge contribution to stabilisation of the euro.

He added that there had been a weakening of some economies in Europe, and pointed out that in Germany the growth forecasts had been cut.

“There is one outstanding exception, and that is Ireland,” Dr Schauble said. “In Ireland the forecasts have increased tremendously.

“We all are jealous of our Irish colleagues who have been so successful, and once again I only can congratulate.”

Minister Schaeuble was joined by the head of the European Investment Bank Werner Hoyer, as well as Finance Minister Michael Noonan and Public Expenditure and Reform Minister Brendan Howlin for the joint signing ceremony officially launching the Strategic Banking Corporation of Ireland (SBCI).

The state-backed SBCI, which was announced last May, will make up to €800m available for small and medium businesses under favourable terms.

Under the scheme, existing main street banks will borrow from the SBCI and lend to SMEs. The banks will assess the risk of lending and will continue to hold that risk. But the lenders must demonstrate that the lower cost of sourcing the funds is passed on to SMEs.

This is needed in order to avoid a breach of European state-aid rules. SBCI will have a lower cost of funding, providing a potentially cheaper option for businesses to access financing.

Money will initially come from German development bank KfW, the Ireland Strategic Investment Fund (ISIF) and the European Investment Bank (EIB).

A spokesman for Mr Noonan said Friday's signing will allow for the money to be released.

Lending is likely to begin before the end of the year, with a memorandum of understanding close to being signed with the two main banks.

The bank was incorporated as a company on September 12 and the interim board held its first meeting shortly after.

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