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 are the main points this morning, March 18 at 18:30. We want to know how your business is dealing with the outbreak, drop us a line at firstname.lastname@example.org
As Taoiseach Leo Varadkar warned: “we’re in the middle of a global and national emergency, a pandemic, the likes of which none of us have seen before”.
“I am confident that our economy will bounce back… but the damage will be significant and lasting. The bill will be enormous and it may take years to pay it,” he said in a speech broadcast to the nation last night.
Banks respond to ‘exceptional circumstances’
The chief executives of Ireland’s five retail banks – AIB, Bank of Ireland, KBC, Permanent TSB and Ulster Bank – and the Banking & Payments Federation Ireland BPFI met with the Minister for Finance Paschal Donohoe earlier today to set out a joint plan to support the thousands of businesses and employees.
In a statement following the meeting the five retail banks said they are introducing measures to help businesses and personal customers whose personal and business circumstances have been impacted by the Covid-19 crisis, and working collaboratively to ensure that continuity of service plans are in place, that critical functions can continue, and that staff remain available to continue to service customers at this time.
The measures are:
- To implement a payment break up to three months for business and personal customers affected by Covid-19, to be followed by ongoing reviews depending on the scale and extent of the situation
- responding to a need for a simplified application process to make it as easy as possible for businesses and personal customers impacted by Covid-19 to receive support from their banks
- to ensure that any Covid-19 application for a payment break and further reviews will not adversely impact the customer’s credit record, and the banks reporting of these facilities
- deferring court proceedings for three months
- to provide working capital support
“These are exceptional circumstances in which people now find themselves and we believe they require exceptional measures. The banks are moving urgently to introduce measures that will best support businesses and personal customers impacted by the Covid-19 crisis. They will also require the full support of key stakeholders in order to make it happen,” Brain Hayes, the BPFI chief executive, said.
Donohoe welcomed the Central Bank’s decision to reduce the Countercyclical Capital Buffer, from 1% to 0% – a decision that will free up bank capital that can be used to provide credit, and to restructure and extend the loans of bank customers, both individuals and SMEs. The reduction will free up more than €1 billion in capital.
Revenue has confirmed that the stamp duty on credit cards will not be collected until July 1, 2020.
Kevin Johnson, the chief executive of the Credit Union Development Association, also released a statement to “assure all members that credit unions will be understanding and will be flexible towards their members genuine financial limitations over the coming months”.
“We have also asked the Central Bank for further guidance on short-term forbearance measures granted to people who are in danger of missing loan payment to ensure that their long-term credit rating isn’t negatively affected. Credit Unions have always been there for people in both the good times and the bad times and will engage fully with all members in difficulty. I would advise anyone who feels they have or will run into trouble, to make contact with your credit union and explain your situation. The best way to do this at the moment would be via email or over the phone,” he said.
On March 9, the government unveiled a financial support package of just over €3 billion encompassing social supports, liquidity funding for businesses and health sector funding.
According to Ronan Dunphy, of Investec, the Irish government was ahead of the majority of its counterparts at the time but it is now clear that this package will be inadequate.
The Taoiseach last night pledged to “take further action as needed”. While he has yet to expand on the nature of such action, he noted that the country has the “capacity and credit rating to borrow billions” and that the final bill will be “enormous”.
“The progress that the country has made since its last economic shock will now come to the fore. Ireland ended 2018 with a government gross debt to GDP of 63.6%, and this will have declined further in the period since then,” Dunphy said.
“The government recorded a budget surplus last year and Ireland’s 10-year yield has spent much of the year to date in negative territory, although it has rebounded in recent days. We are rapidly heading into a storm, but we do so from a stronger position than at any point in the past decade,” he added in a note this morning.
Minister for Finance Paschal Donohoe is set to discuss a joint plan to provide support for customers affected by the fallout from the coronavirus with the chief executives of Ireland’s five main banks, according to reports.
Greencore, the Irish food company, has said it is too early to predict the impact of Covid-19 on its full-year results.
The listed group, which is the biggest pre-packed sandwich maker in Britain, said a statement this morning that it is committed to playing its part in keeping the UK fed, working with colleagues, suppliers and customers to maintain food through all scenarios.
“We have three priorities as we lead our Group through the COVID-19 pandemic – keeping our colleagues safe, feeding the UK and protecting our business. The health and safety of our colleagues, customers and business partners is paramount. We are closely monitoring all aspects of our business and are confident that we have the team, customer partnerships and protocols in place to maintain food supply through this uncertain period,” Patrick Coveney, the company’s chief executive officer, said.
The retail sector continues to suffer, as Penney’s is to close its Irish stores in response to the coronavirus crisis until further notice. The retailer and Mandate general secretary John Douglas confirmed the news to our colleagues at TheJournal.ie, with the latter saying that the move will affect around 10,000 staff.
One Irish tech company has launched a hand-washing app to ensure health professionals, workers and the general public are correctly washing their hands to the World Health Organisation (WHO) standards.
SureWash’s system uses augmented reality for the WHO hand hygiene protocol. The company uses live video to measure people’s handwashing technique and then gives real-time feedback on their proficiency.
Global stock and oil markets plunged Wednesday, as vast stimulus measures failed to offset heightened concerns that the worsening coronavirus outbreak will tip the world into a deep downturn.
- Ireland’s ISEQ dropped by just over 2% in initial trading and closed down by 7.7%
- On Wall Street, the Dow Jones Industrial Average was hit by another loss, with trading was suspended just before 17:00 due to the steep losses.
- London’s benchmark FTSE 100 index shed 4%
- In the eurozone, both Frankfurt and Paris dropped by 5%
- Asian markets plunged Wednesday, reversing an early rally fuelled by global stimulus pledges
As the European Union shut its borders to travellers from outside for 30 days to stem the pandemic’s ferocious spread and countries going into lockdown, there is a broad expectation the world economy will plunge into recession as markets convulse.
Countries have begun a multi-billion-dollar global fightback against economic havoc wreaked by the coronavirus.
President Donald Trump said the White House was discussing a “substantial” spending bill with Congress that would include immediate cash payments to Americans.
British Finance Minister Rishi Sunak also unveiled an “unprecedented package” of government-backed loans worth £330 billion for businesses struggling in the sudden economic paralysis caused by mass self-quarantine. France has pledged a €45 billion aid package.
Something you might have missed
As social distancing hits the property market, we took a look as Irish property agents are turning to virtual viewings.
With reporting from AFP
Note: This piece will be updated with additional information during the day.