Lacking conviction on plans for SMEs
Cantillon:The maxim that failing to prepare is preparing to fail is often attributed to Benjamin Franklin and, more recently, Roy Keane.
The Government, however, seems to be turning this wisdom on its head when it comes to its strategy for helping the small and medium enterprise (SME) sector.
Buried in the revised memorandum of understanding between Ireland and its bailout partners published on Tuesday is what looks like preparations for the failure of the Government’s seven-day-old strategy to get credit flowing to the SME sector.
Among the “actions” to be completed in time for the 12th review of the bailout programme in the autumn is a commitment under the heading “Access to SME credit” to “consider the appropriateness of further enhancements to the company law framework to reduce costs and achieve efficiency gains, including the potential for an administrative body to facilitate SME restructuring”.
Leaving aside for the moment the interesting conundrum of how a quango-bashing Government will justify the establishment of an SME quango on the basis of efficiency, the decision of the EU-IMF-ECB to take an interest in the area and insist on a review (and if necessary further action) in the middle of the year indicates that it is also far from convinced that what is planned will be sufficient.
Their concern is best understood in the context of deputy Central Bank governor Matthew Elderfield’s comments last October in which he identified SME debt as the next item on the agenda after residential mortgages when it came to sorting out the banks. He also noted similar foot-dragging on the part of the banks when it comes to facing up to the problem.
It is clear the Troika wants to see some progress in this area and hence the flurry of announcements starting with Circuit Court examinership for SMEs and culminating with the budget measures.
The Troika is giving the Government a chance, but at the same time has laid down a marker as to what will happen if it fails.
Elan’s future clearer – and less certain
It’s back to the future for Elan’s drug discovery business after shareholders voted yesterday to create a new listed business accommodating the group’s drug discovery business.
While the focus for Elan these days is very much on leveraging the success of its blockbuster therapy for multiple sclerosis, Tysabri, for the bulk of its existence Elan itself has been a drug development business.
The genesis of its success – and some spectacular failures – was the decision by former chief executive Donal Geaney to acquire Athena Neurosciences.
Dale Schenk was one of the early employees at Athena. Now he is the founding chief executive of the spin-off from Elan and one of his first moves has been to rename the fledgling business.
Originally called Neotope Biosciences, by yesterday’s extraordinary general meeting which sealed the deal, the company had morphed into Prothena – a very pointed nod in the direction of its predecessor.
That will be one of Schenk’s easier calls. Prothena will be a very rare creature – a listed company focused entirely on early stage drug development. That’s a very high risk punt, as Elan’s own stock market performance down the years attests – and it had the backstop of a solid drug delivery business that could deliver contract income.