Cowen says four-year plan in place by middle of month

TAOISEACH BRIAN Cowen said yesterday the Government intended to have its four-year budget plans in place by around mid-November.

Speaking at the Small Firms’ Association annual lunch in Dublin yesterday, Mr Cowen said Irish people need to “look to our strengths rather than magnifying our weaknesses”.

In an upbeat speech Mr Cowen said Ireland differed from other so-called peripheral nations.

“We have 80 times the US investment that Greece has and 23 times US investment compared to Portugal. We are moving into a balance of payments surplus next year which is unique among those that have high deficits in the euro area.”

Mr Cowen described the crisis as “a once in a century event”.

He refused to be drawn on his response to the widening spreads between Irish and German bonds, saying Ireland was “not in the markets at the moment”.

The association yesterday called for the Government to introduce a Government-backed loan guarantee scheme. Chairman Dr Aidan O’Boyle said while such a scheme was introduced in Northern Ireland a year ago, “time was running out” in the Republic.

“Since September 2009, we have been told by Government that such a scheme was under detailed study.

“The reality is that unless the lending risk to the banks is reduced by the introduction of a loan guarantee scheme, many small businesses will not survive.”

The association also called for the restructuring of the funding mechanism for local authorities through introducing a site valuation or property tax coupled with metered water charges.

“We must ensure that the user-pays principle applies in the future and that small businesses don’t continue to be the fall guys picking up the tab when central funding is cut” Dr O’Boyle said.

He also called for a return to a banking system in which local branches play a key role in supporting small businesses.

The managing director of AIB in the Republic, Robbie Henneberry, told delegates the bank was not just looking at businesses in terms of the current cycle when making lending decisions, but was also considering their medium and long-term potential.