Coronavirus: Cash support for businesses should be extended, Chamber says

The Chamber of Commerce, Enterprise and Industry says coronavirus State aid should reflect turnover losses as it proposes new package that will add €48 million per month to government spending so far

Majority of businesses experience drastic drop in turnover as a result of the Covid-19 crisis
Majority of businesses experience drastic drop in turnover as a result of the Covid-19 crisis

Government will need to fork out €48.3 million more a month in additional support to companies, according to a new proposal put forward by the Chamber of Commerce.

The proposal will see companies that experienced a drop of 50% in their turnover as a result of the coronavirus, benefitting from the maximum aid scheme of €800 per employee per month.

The Chamber of Commerce, Enterprise and Industry is also proposing that businesses that witnessed a drop of 25% in turnover should receive €400 per employee per month.

The country needs further economic stimulus to counteract the Covid-19 crisis, the organisation said, urging the government to disregard debt-to-GDP ratios at this critical juncture.

An economic aid package unveiled last month would cost government more than €71 million per month but only some 60,000 workers would benefit from the €800 per month per employee package. More than 100,000 employees work in other sectors for which the government allocated €161 per month per employee.

The Chamber's proposal to extend government support to more businesses based on their loss of turnover rather than the sector they work in is expected to cost government €48.3 million per month on top of the measures already put in place.

The Chamber has proposed that eventual verifications by government through the VAT returns of beneficiary companies could be carried out with the possibility of reclaiming funds in cases of ineligibility.

It said the assistance provided so far has helped to mend the “gushing wounds” of the economy, and has already gone a long way to sustain some sectors.

However, the country’s economic prospects are far from healthy, the Chamber added, calling on government to ensure that companies and households are not allowed to run out of money.

“It is absolutely essential for government to ensure that workers’ incomes are sustained and aggregate demand maintained, while minimising costs for collapsing businesses. In order to do so, government must not be averse to increasing its debt and disregard any previous commendable targets for debt/GDP ratios. The urgent priority at this point of utter emergency is to ensure that the economy survives to see the future. The future will then deal with the debt incurred today for the purposes of ensuring a tomorrow,” the organisation said.

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