ACCESSING CREDIT STILL BIGGEST PROBLEM FACING SME SECTOR - The small and medium enterprises association holds its annual conference at the RDS in Dublin this morning. ISME chairman John Ryan says the biggest problem facing small and medium sized businesses is accessing credit from the banks. After the way the Government dealt with the banks over the recent ECB rate cut, he says he would welcome a similar approach for the SME sector. He says that even when the banks do grant credit to viable businesses, the funds come with onerous obligations such as personal guarantees.
Mr Ryan says that the SME sector the capability to support and create more jobs and should be supported in doing so. They need extra liquidity and need the banks to deliver this. He says that it is hard to distinguish between the two pillar banks - Bank of Ireland and AIB - as both are simply not lending to small businesses. He suggests the Government set up a state bank which has a special remit to lend to small and medium sized businesses.
On doing business in Italy, Mr Ryan says he is very concerned about what it happening there. He says that if Italy were thrown out of the euro zone, businesses costs would jump and it would create a level of uncertainty which businesses just does not need.
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MORNING BRIEFS - The Senate in Italy is to vote on austerity measures demanded by the European Union to save the single currency. Italy is one of the bigger countries caught in the eye of the storm because of the enormity of its national debt and the view that it will have a difficult job generating sufficient economic growth in the next few years to shoulder interest rate payments being demanded by the market. A vote in favour of the austerity measures is seen as a foregone conclusion. This morning the yield on Italian ten year bonds is drifting further below the 7% threshold seen as likely to trigger a call for financial help. There were reports that the European Central Bank was back buying bonds in the secondary markets to depress Italian debt prices. Yesterday, Italy paid a record rate of almost 6.1% on an issue of €5 billion of 12-month debt.
*** But now investors concerns are turning to France because the gap between how much more expensive it is for France to borrow compared to benchmark or safe haven German bunds widened to an historic high of 1.7%. The ratings agency Standard & Poors said it has mistakenly announced to some of its clients that it had downgraded France's AAA credit rating because of a technical error.
*** A report from PWC and IAB advertising - the trade association for the online advertising industry here - suggests that spending on online advertising was valued at €65m in the first six months of the year. That is a 20% gain on the same six months in 2010 and comes thanks to increases in the amount of time people spend using the internet. It is estimated that online advertising accounted for 13% of total advertising spend in the period.
*** The euro has gained slightly in value on yesterday. This morning it is worth $1.3630 and 85.67 pence sterling.
