EIB expects to sign loans with Irish banks

The European Investment Bank expects to sign loan agreements with Irish banks next year in a bid to help businesses get access to funds, EIB vice president Plutarchos Sakellaris said.

The EIB plans to make €30 billion in capital available to small- and medium-sized businesses (SMEs) in the EU, to help shore up their access to credit while lending conditions are tighter.

Mr Sakellaris said the EIB was in talks with four major banks in Ireland, without giving further details.

"We are hoping, because we do see things quite positively, that in the first quarter of next year we will have some deals with at least some of them," he told public broadcaster RTE in an interview.

Mr Sakellaris met with Finance Minister Brian Lenihan last Thursday during a visit to Ireland. Mr Lenihan has urged Irish banks to utilise the EIB facility to the "maximum extent possible" to help speed up funding to businesses.

"They are very eager to borrow from us. They are very motivated," Mr Sakellaris said. "We have promised them that we are going to do our diligence as quickly as possible."

He said the banks will be "contractually obliged" to pass on better borrowing rates to the SMEs.

"At this time of financial crisis it should make a big difference because we are seeing the credit crunch in all European economies towards the SMEs in various sectors," he said.

"We are stepping in with fresh funds that commercial banks will have available to pass on. So we are alleviating to some extent the credit crunch."