[WATCH] Government in talks to secure low interest bank finance for companies

Low interest rates on bank loans for companies unaffected by government’s aid package may be on the horizon, Clayton Bartolo said.

The Financial Services Parliamentary Secretary said talks were underway between the Malta Development Bank and private banks to see how the government’s guarantees can help to lower loan interest rates.

Speaking on TVM’s Xtra, Bartolo would not give detail. “We may come to an agreement in the coming days, but professionalism forbids me from speaking about the rates which are being discussed and proposed,” he said. 

Bartolo did not put forward solutions for the 100,000 workers in sectors unaffected by government’s aid package, insisting these companies should seek bank finance.

He insisted the €800 per month per employee package was directed towards workplaces that stopped operating because of public health measures to contain the coronavirus pandemic.

The aid offer will cover 60,000 private sector employees but leaves another 100,000 in the lurch.

“The package announced this week guarantees the income of the primary employment of those families who, for some reason or other due to public health measures, are unable to work,” Bartolo said. 

Asked by show host Saviour Balzan as to whether government had any plans on providing further aid to the unaffected sectors, Bartolo said that such businesses should turn to the banks for help.

“The package put forward by the government included both a direct cash injection, as well as measures and guarantees to help those enterprises which were not directly impacted and that do not qualify for the first type of aid to turn to the banks so that they can receive help in this time”, Bartolo said. 

The parliamentary secretary argued that the question of liquidity is the most pressing concern for such businesses, and that the measures taken will ensure that they will have enough liquidity to continue paying employees’ wages, without being put under undue stress.

David Xuereb

David Xuereb aid package is ‘action for survival’ 

Meanwhile, Chamber of Commerce President David Xuereb said that the government’s latest economic measures are not there to help businesses but rather, to help employees. 

“This is an action for survival,” Xuereb said, noting that these benefits are not meant to help maintain the same quality of life or business rhythm that we had before. 

“There are few people who would be satisfied with €800,” Xuereb said. “The €800 is the safety net, so that we can ensure that, during this period, no one will fall behind and end up in poverty”.

The Chamber of Commerce president conceded that this economic package does not necessarily reach everyone in the same way, but said that the first step was to help those enterprises that directly and drastically impacted by the measures taken in the interest of public health.

“What we need to do now is see if these measures are truly helping those most vulnerable sectors, and see if there are other sectors as vulnerable as them which we need to identify and consider as well,” Xuereb said, while warning against the mind set of viewing these benefits as some sort of government bonus.

“What was proposed is a move in the right direction,” Xuereb said, “but there is more that we can improve upon as a country, and I am sure the government knows this”.

Ivan Bartolo

Ivan Bartolo offers to help government

Newly elected Nationalist MP Ivan Bartolo echoed these sentiments, expressing his hopes for further economic packages from the government, and describing the latest measures as “a step in the right direction, but maybe a few steps too short”.

Bartolo noted that around 104,000-110,00 employees will be receiving little to nothing from these measures, arguing that the government is not thinking about those suffering from the ripple effects of the drying up of the tourism industry. 

“This doesn’t mean that the package announced is bad,” Bartolo said, “it just means that it is not enough, because the circumstances are what they are”.

The Nationalist MP also called for unity in these times, praising the work being done by Clayton Bartolo and Edward Scicluna, and offering to help them in generating ideas as to how this crisis can be tackled.

“My position from the opposition is very simple… I want to help the government fight Covid-19. Right now, there is the need for a concentrated effort – all the minds in Parliament and even the skills we have outside Parliament – to join together and generate ideas so that we can fight this monster.”

Tonio Fenech

Tonio Fenech calls for ‘time-out’

Meanwhile, ex-finance minister Tonio Fenech called for a more holistic approach to tackling the economic impact of the coronavirus.

Fenech argued that, while it is right for the government to work to save people’s jobs, it also has to make sure that businesses are strong enough to rebound and rebuild once this pandemic is over. 

He called for an “economic time-out”, starting from the banks, which, he argued, need to give a breath of fresh air to the economy by issuing a moratorium, and not charging interest for the duration of this crisis. 

Fenech insisted that everyone has to work and sacrifice together for the time being, in order to benefit once more in the future.

He stressed that worrying about national debt should not be the government’s concern at the moment, and voiced his concerns that the government is being too reactive instead of proactive. 

“It may be wiser to use the full breadth of the war chest now rather than later when it could be too late for several businesses,” Fenech said.