Employers group Ibec has called on the Government to provide new emergency cashflow measures that would provide more than €26bn in liquidity for businesses large and small across Ireland to help them through the unfolding economic crisis created by COVID-19.
Ibec’s proposals to Government includes a range of measures including tax forbearance and rebates, direct cash supports, liquidity supports and State-backed guarantees on debt and export credit.
Ibec says the measures, if implemented, would cost the Irish taxpayer €5.9bn, but would underpin €26.4bn of liquidity in Irish businesses of all sizes.
There is a lot here. Enough to help underpin ~€26bn in liquidity. But the total potential cost to the State would be €6bn at a max - if things got really bad, a lot less if they don't. & once loans are repaid the total cost would be around €3-4bn. 1.5% of national income 10/ pic.twitter.com/B2t1ALJN0Y
— Gerard Brady (@GerardBrady100) April 3, 2020
Ibec’s chief economist Gerard Brady said many orders shipped by Irish businesses in January, February and March have not been paid for because of stretched credit facilities and cashflow challenges.
“In the coming weeks, bills, rents and other fixed costs will go unpaid as a result of this cashflow freeze. For companies, this will put increased pressure on their ability to trade and finance their operations,” said Brady.
“Left without intervention, there will be a significant spike in liquidations over the coming months and a very slow return to normal operations, investment and expansion by firms who stay open through the crisis. There is no V-shaped recovery,” he said.
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