Business group Ibec has called for emergency liquidity measures by the Irish government to support vulnerable businesses impacted by Covid-19.
The business group Ibec has warned that without intervention there will be a “significant” spike in liquidations over the coming months.
Ibec has called for a programme of guarantees that through use of European Commission supports would deliver €26bn in liquidity to firms but that would cost the State at most €5.9bn.
A package of measures proposed by the business group, it claims, would bring the total Irish Government crisis response support to the economy to about 10pc of GDP, bringing Ireland into line with other countries.
Spike in liquidations
“Covid-19 is having a significant impact on liquidity in the economy,” said Ibec director of Policy and Public Affairs Fergal O’Brien.
“For many businesses, payment timelines are stretched, credit facilities provided by large firms are coming under strain, and the need for cashflow has greatly increased.
“Left without intervention, this will result in a significant spike in liquidations over the coming months and have the knock-on effect of a far slower return to normal operations, investment and expansion for firms who stay open through the crisis.”
O’Brien pointed to the recent announcement by the European Commission on a new temporary framework on State Aid in order to combat the economic effects of Covid-19 provides an opportunity for Government to be much more aggressive in supporting enterprises.
“The State can now provide the benefit of low-cost money directly into Irish SMEs and larger businesses in ways that are not possible in normal times. Solutions to rents and local rates challenges facing businesses must also be addressed.
“The total programme of guarantees, loans, and other supports in this Ibec report would help ensure €26.4bn of liquidity to the economy, but at a maximum would leave the Exchequer exposure at €5.9bn.
“Although these are significant sums, there are no cheap alternatives. Without the implementation of these measures the road to recovery from the crisis will be longer and more expensive,” O’Brien said.
Pictured above: Almost empty streets of Dublin during the Coronavirus outbreak. Georges’s St Arcade shopping mall closed for business as result of Covid-19 pandemic. Image: 4H4 Photography/Shutterstock
Written by John Kennedy (firstname.lastname@example.org)
Published: 6 April, 2020