Mr. Tom Parlon:

The lack of finance and its cost are major factors in the construction industry that are holding up the necessary residential building. I have met Sparkassen and its model looks good. I can understand that our Government has a vested interest in allowing the pillar banks to rebuild their balance sheets, but it should not be at the cost of a chronic undersupply of housing with all the social and other effects. One of the latest reports of the Central Bank stated that Irish households have more than €100 billion on deposit. We feel we are a very indebted country, but there is €8.2 billion more in deposits than there is in loans to households at the moment. There is a wall of cash there. The credit unions are awash with cash, or all of the good ones at any rate. Unfortunately, a few have difficulties, but they are a minority. A friend of mine works in a credit union in a very small country town which I was astonished to discover has more than €30 million. His job is to find someone who can take a loan. The credit unions are very restricted in what they can do and they have to lodge their deposits in pillar banks which charge them for minding their cache of money.

The challenge for this committee and for all of us will be to find a way to release the money. Representatives of foreign funds telephone me every other day asking how they can provide funding. When I ask more, they are all looking for quite high interest rates. However, there is a large amount of cash around and there is a need to use that cash for infrastructure. I know that our Government is restricted by the fiscal rules in what it can borrow for our capital programme. I think there will be some flexibility there. There is a new vice president of the European Investment Bank and that bank is highly active in lending to our semi-State companies and is keen to invest money, but obviously the fiscal rules are restrictive.

This is a big challenge for us, right across the board. Everybody could do with more working capital at cheaper rates. The problem is that we are not able to get access to it at the moment.