Madam, – What the country now needs is an OBAMA. I am not referring to a prescription for soundbite political leadership, but to an asset management agency for Ireland’s small business sector aimed at encouraging job creation.
The Ordinary Business Asset Management Agency would manage non-performing property investments of SME owner-managers, with conditions attached to ensure job creation and economic stimulus.
The interest-only repayments on that €500,000 euro Shannonside holiday home or shuttered flaking provincial commercial unit being approximately €2,500 per month, I would surrender that property, but not the liability, to OBAMA. In return I would be bound to spend that €2,500 per month on wages and PRSI to re-employsomeone, to create a job, to grow my business.
Morgan Kelly of UCD’s recent paper on the Irish credit bubble states “The property-related borrowings of the owners of smaller Irish companies are now an impediment to their companies’ survival and may lead to large job losses as owners are forced into bankruptcy over losses in property speculation. The destruction of the Irish entrepreneurial class may prove one of the most enduring and costly consequences of the property bubble.”
Entrepreneurs define themselves by the successes of their business ventures and would prioritise their business's survival ifgiven a choice. Entrepreneurs will take knocks and pick themselves up again time after time. That is the nature of the beast.
If business owners were freed from the constraints of paying back large mortgages for secondary properties, cash would transfuse the small to medium enterprise sector, fuel growth of Ireland’s GNP and get the private sector back to work. – Yours, etc,