Covid-19: It has been a long week as Irish business faces a new reality

IN THIS TURBULENT time, Fora is going to bring you updates every morning and evening on the most relevant issues for Irish business dealing with the outbreak of Covid-19. Here’s are the main points this evening, March 13 at 6 pm. We want to know how your business is dealing with the outbreak, drop us a line at news@fora.ie 

The day after the night before: Schools out, games off and you could well be working from home.

Our colleagues over at TheJournal.ie have an update this morning on what is going on in Ireland and around the world , while The42.ie has details on all the sport that has been postponed. 

At Fora, we took a look at what this all might do to the Irish economy, which is in for a turbulent ride. 

In the thick of it

The economic effects of Covid-19 are already being felt by businesses across the country, with Paschal Donohoe, the minister for finance, stating that it is critical Irish businesses that are vulnerable but are healthy have the support that is available to work their way through the crisis. 

“People should be reassured that Ireland is coming at this from a position of strength and that everything that can be done is being done to deal with this public health crisis. We can, and we will, get through this,” he said. Paschal Donohoe, the minister for finance,

As SMEs face down cashflow and trading issues, Revenue has suspended the application of interest on businesses’s late payments of VAT for the January-February return and late payments of employers’ PAYE liabilities for February and March. It has also said that no debt enforcement activity would take place until further notice.

The Government also held a meeting with around 40 senior representatives of the retail sector earlier, to discuss how to help the sector cope with the strain of extra demand due to customers stocking up for the Covid-19 lockdown.

Some relief 

The European Commission, the EU’s executive arm, warned on Friday that growth in Europe would likely fall into negative territory due to the economic fallout of the coronavirus outbreak.

To deal with the crisis, it offered member states “maximum flexibility” to boost spending and subsidies beyond normal rules to help fight the Covid-19 coronavirus. “The shock is temporary, but we must work together to ensure that it is as short, and as limited as possible,” EU Commission chief Ursula von der Leyen said.

The Central Bank expects banks here to use measures announced by the ECB yesterday to support the economy. Gabriel Makhlouf, the Governor of the Central Bank of Ireland, said that it is clear that the pandemic is disrupting economic activity, both internationally and in Ireland, with adverse implications for the financial position of households, businesses and the financial system in the near term.

“We continue to monitor the evolving situation and to assess the impact on the economy and the financial system. Our focus is on ensuring monetary and financial stability and that the financial system operates in the best interests of consumers and the wider economy. We are engaged with the financial sector to ensure that firms are responding effectively to the evolving situation,” he said, 

It wasn’t pretty on the markets yesterday as global equity markets plunged, with some suffering their worst losses in decades, as emergency measures by central banks failed to douse fears over the mounting economic toll from the coronavirus. 

Everything calmed down a little today as markets rebounded, but still have a way to go to overturn the previous day’s plunge: 

• The Iseq index opened up by just over 3%, but fell back over the day to close at a raise of less than 1%
• Having peaked up by more than 5%, London’s FTSE 100 closed around 1.6% higher
• Stoxx Europe 600 gained 1.4% as it rebounded following its worst single session in history
• Hong Kong stocks ended a tumultuous week with another loss Friday, as the Hang Seng Index dropped 1.14%
• Wall Street stocks were solidly higher at midday Friday, winning back some of the ground lost in a brutal rout as the S&P 500 gained 1.2%

Communication is key

Uncertainty may be something that businesses have become increasingly used over a turbulent few years, but the current crisis has brought it to another level. 

In a statement yesterday evening, Chambers Ireland’s Chief Executive Ian Talbot welcomed the government’s directives but pointed to a need to develop a coordinated communications plan to provide clarity about available supports.

“Many small businesses and the self-employed have had their work cancelled for the foreseeable future, while retailers around the country have been feeling tighter trading conditions since last week, and the hospitality sector in some parts of the country are facing cancellation rates upward of 60-70%. In parts of the country where Covid-19 first took hold, businesses are already operating in dire trading conditions,” he said.

“We stand ready to support the State in whatever future actions prove to be necessary,” Talbot said and added: “We ask that the State works with us by providing certainty for business through the challenges ahead”.

Something you might have missed

You would be forgiven for missing it earlier this week, but the European Commission has unveiled a new industrial and SME strategy – we took a look at how the plan could have an impact on the landscape for startups, digital businesses, research institutes and the future of the green transition.

With reporting from AFP

Note: This piece has been updated with additional information

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