Mr. Andrew McDowell:

When we provide either funding or guarantees to banks, we make it a condition of the transaction that they pass on the financial advantage to the small and medium-sized enterprises. It is true that the cost of credit is higher from Irish banks than in most other eurozone countries. Where the funding has been based, however, on an EIB group guarantee, it is significantly cheaper. Last December, for example, we did a COSME transaction where we provided with the Strategic Banking Corporation of Ireland an 18% guarantee to the banks on their lending into the agribusiness sector. We expect there to be up to 10,000 beneficiaries of that €350 million of lending. The interest rate on those loans was less than 3%, which was quite exceptional. The initial tranche of that, in fact, which came to approximately €100 million, was drawn down within about eight weeks. That was without collateral.

There is an argument that the banks are not lending and that there is not enough credit demand in the Irish economy. What we have certainly noticed with this transaction, however, is that when one gets the conditions and the interest rate right and removes the collateral requirements there is certainly a lot of credit demand in the Irish economy. This is informing our view of how to co-operate even more intensively with the Irish Government and with the SBCI in terms of looking at ways of alleviating the impact of Brexit on a wider number of sectors in the Irish economy.