Gap between Irish and EU interest rates continues to widen
Loans to farmers and other small businesses are now two percentage points more expensive in Ireland than in the rest of the Eurozone, according to Ibec.
Interests on business loans are typically twice as high in Ireland as in the rest of the Eurozone. \ Jack Caffrey
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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
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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Title: Gap between Irish and EU interest rates continues to widen
Loans to farmers and other small businesses are now two percentage points more expensive in Ireland than in the rest of the Eurozone, according to Ibec.
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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
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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