CEB supports job creation in Ireland
22 January 2016
PARIS - The Council of Europe Development Bank is lending € 200 million to the Strategic Banking Corporation of Ireland (SBCI) in order to provide financing to Irish SMEs.
Despite recording a strong GDP growth in the last two years and recovering well from the financial crisis, the economy of the Republic of Ireland is still burdened with high unemployment, over 20% amongst young persons.
SMEs, which account for 70% of jobs in the private sector, can play an important role in helping to rebuild the economy. Not only do small businesses provide jobs in a wide range of sectors, but they are also a vital source of employment in rural areas of the country. Nevertheless, Irish SMEs are currently faced with the highest borrowing interest rates in the Eurozone.
CEB funds will facilitate access to financing for a large number of SMEs, which will give a boost to the SME sector and contribute significantly to job creation and preservation. The programme will benefit businesses spread across the country, which means that the CEB loan will help economic recovery on a national scale.
The programme will finance fixed assets and productive equipment, such as motor vehicles, IT and office equipment, and the construction, renovation and purchase of facilities. It will cover SMEs in a wide range of sectors, including construction, wholesale trade, industry, manufacturing, retail, and the marketing of agricultural food products.
The SBCI is a newly established national institution. It is mandated as a wholesale market entity to source funding and channel financing to Irish SMEs through long-terms loans to on-lenders.
CEB Governor Rolf Wenzel said: “We are very pleased to be joining forces with a new partner, the SBCI, in order to contribute to the rapid economic recovery of Ireland, a valued CEB member country. Job creation and preservation is one of our main sectoral lines of action, so the Bank is well-placed to assist its member states in this area.”
A CEB member since 2004, Ireland has had loans approved by the Bank in a variety of areas. The two sectors which have benefited the most from CEB funding are social housing for low-income persons and public infrastructure, particularly administrative and judicial infrastructure and services.
Set up in 1956, the CEB (Council of Europe Development Bank) has 41 member states. Twenty-two Central, Eastern and South Eastern European countries, forming the Bank's target countries, are listed among the member states. As a major instrument of the policy of solidarity in Europe, the Bank finances social projects by making available resources raised in conditions reflecting the quality of its rating (Aa1 with Moody's, outlook stable, AA+ with Standard & Poor's, outlook stable and AA+ with Fitch Ratings, outlook stable). It thus grants loans to its member states, and to financial institutions and local authorities in its member states for the financing of projects in the social sector, in accordance with its Articles of Agreement.