Prime Minister wants £12bn bailout to help small businesses

Oct 5 2008 By Derek Alexander

GORDON BROWN has asked Europe for a £12billion emergency fund to help small businesses survive the credit crunch.

He said it was vital they get cash fast to continue employing staff and provide services.

The Prime Minister added: "We have to show we can do more to help small businesses, as well as households, through a difficult time."

He revealed his proposal before a meeting of EU leaders in Paris yesterday. Brown asked fellow G8 members France, Germany and Italy to support the move for money to be made available to companies right away.

And he also insisted at the meeting that no sound, solvent bank should be allowed to go bust.

The news has been welcomed by business leaders in Scotland.

David Lonsdale, assistant director of CBI Scotland, said: "This sounds like a very encouraging step at a time when the economy isn't doing well and small firms are finding it harder to access the cash they need to grow their business."

Stuart MacKinnon of the Federation of Small Businesses in Scotland said many small firms had saved money to help them through hard times but warned their emergency funds would soon dry up.

He said: "It is a good move by Gordon Brown to try to make sure Scottish firms get instant access to this sort of cash.

"Small businesses are the real powerhouse behind the economy and if they struggle to get funds then we are all in trouble."

Pressure is mounting on Europe's "Big Four" to work together to find a solution to the deepening crisis.

Yesterday's four-hour summit at the Elysee Palace was arranged by French president Nicolas Sarkozy, who is also EU president.

He was joined by Brown, German chancellor Angela Merkel and Italian president Silvio Berlusconi, as well as Jean-Claude Trichet, head of the Euro-pean Central Bank and Jose Manuel Barroso, president of the European Commission.

They welcomed Washington's approval of a £379billion rescue fund in United States.

But calls for a similar package to be set up by the EU's 27 members have received a poor response.

Before he left 10 Downing Street, Brown said world leaders must work together to clean up the system, both in America and Europe where there have been problems.

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