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The difference in the cost of borrowing between Ireland and other countries using the euro has more than doubled in the past four years, the business federation Ibec has found.
"For a €500,000 debt-financed investment, the spread would have cost the Irish firms €4,400 more in annual interest payments than a Eurozone competitor in 2014; that figure has now risen
to €10,355," Ibec calculated in its latest quarterly economic outlook.
Such inflated interest rates apply to loans to small and medium businesses including farmers, while the gap with the rest of Europe is smaller for mortgages or larger firms.
Risk profile
All countries in the Eurozone are subject to the same central bank benchmark rates, so the difference lies elsewhere.
Ibec explains it by the overhang of property-related debt in some sectors such as retail and hospitality, which raises the risk profile of business loans as a whole.
The findings match those of the ICMSA, which conducted a comparison of interest rates across the EU last month and concluded that farmers were being "pillaged" by Irish banks.
ICMSA president Pat McCormack called on the Government and regulators to intervene on the issue.
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