Covid-19: Businesses count the cost as restrictions bite

This evening’s main coronavirus points for business.

By Philip Connolly Editor, Fora
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 morning, March 16 at 6 pm. We want to know how your business is dealing with the outbreak, drop us a line at news@fora.ie  

Our colleagues over at TheJournal.ie have an update on the latest information as Ireland deals with the outbreak and Boris Johnson has urged British people to avoid social contact and to work from home where they can.  

Running dry

Ireland is braced for a lot of job losses, particularly in the restaurant, pub and childcare sectors, as measures to stem the spread of the coronavirus bite. 

The government asked all pubs to close from last night, following a meeting between government officials, the Vintners Federation of Ireland and the Licenced Vintners Association amid concerns that pubs were struggling to follow the social distancing guidelines. 

The advice, which includes hotel bars, called for pubs to shut until at least 29 March. The Licensed Vintners Association (LVA), which is the representative body for Dublin publicans, has written to the chief executives of the main banks and insurers seeking an urgent meeting, following the closure of pubs across the country.  

Ireland’s retail sector is also braced for a rough period, with Retail Excellence calling today the “hardest and most challenging day in Irish Retail history”. 

To help people who have lost work because of the outbreak, the government has established a Pandemic Unemployment Payment. The payment of €203 per week will be available, for a six-week period, to all employees and the self-employed who have been affected by the seizing up of economic activity. 

People are being urged to download application forms online and apply via the post rather than visiting an Intreo centre, where social distancing rules will be applied and lines are expected to be long.   

The government is asking employers to continue paying staff,  at least at the rate of €203 per week, throughout the national emergency. Those that do so can apply for a refund of €203 per week from the Department of Employment Affairs and Social Protection.  

Ibec chief executive Danny McCoy said that it continues to be imperative that all stakeholders adhere to Government guidance on social distancing measures for the long-term sustainability of our society.

“However, blanket measures imposed on business will unnecessarily fuel disruption and inevitably wreak long term economic damage. Business is diverse and includes manufacturing and other essential services which can follow social distancing measures to protect the welfare of employees,” McCoy said. 

Chambers Ireland called for all businesses, Government and State bodies to be flexible and responsible to the needs of their business and economic partners to ensure business continuity through this crisis.

A coordinated response 

  • The Stoxx Europe 600 Index dropped by just shy of 5%
  • Ireland’s ISEQ was down in line with Europe, dropping further over the course of day before recovering a little to close at a fall of 7.9%
  • In Britain the FTSE 100 closed about 4% lower
  • Wall Street stocks plunged early on Monday as the S&P 500 plunged 13% to trigger another automatic 15-minute halt in trading on the three main US stock indexes
  • In Asia, the benchmark Shanghai Composite Index closed down 3.4% while the Shenzhen Composite Index on China’s second exchange fell 4.83%
  • Hong Kong’s Hang Seng Index finished down 4.03% 

European Union leaders will take part in a crisis videoconference tomorrow to coordinate actions to fight the spread of the coronavirus.

The European Commission announced proposals to introduce a temporary 30-day restriction on non-essential travel to the EU, as Ursula von der Leyen made the announcement in a bid to reduce the pressure on the healthcare systems of EU countries.

The proposal will ask all Schengen area countries, as well as Schengen Associated states – Bulgaria, Croatia, Cyprus, and Romania – to implement the ban. Ireland and the United Kingdom are not counted in the 26 Schengen area countries but are being requested to accept and implement the restrictions. Travel between the UK and Ireland, however, would remain unaffected by the ban due to the common travel area between the two countries. 

Finance ministers from the Group of Seven, the world’s richest nations, are planning to consult weekly on economic steps. G7 leaders have pledged to use all their tools to safeguard the economy and help workers hurt by the coronavirus pandemic. 

EU finance ministers scrambled Monday to find answers to the devastating effects of the coronavirus outbreak.

“We know the virus hasn’t reached its peak. We must not kid ourselves,” said Mario Centeno, the Portuguese finance minister, who presides the Eurogroup meeting of eurozone ministers. 

The ministers, exceptionally joined by colleagues from outside the single-currency euro bloc,  are expected to sign off on a raft of proposals by the European Commission, the EU’s executive arm, including waiving rules on public overspending. The measures will accompany a “surgical” stimulus decided the European Central Bank. 

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The US Fed also added to efforts by central banks around the world to combat the outbreak as it cut interest rates and unveiled asset purchases, while the Bank of Japan also unveiled new measures. 

Tightening travel

The travel industry was among the first sectors to feel the effect of the outbreak and the issues are ongoing. 

  • Ryanair is planning to ground the majority of its fleet across Europe over the next seven to ten days and has said it will have to make significant reductions to working hours and payments
  • Tourism giant TUI said it was suspending the “majority” of its operations over coronavirus fears 
  • IAG, the owner of Aer Lingus, British Airways and Spanish carrier Iberia, said it would slash the group’s flight capacity by 75% during April and May
  • Its chief executive, Irishman Willie Walsh, is also delaying his retirement to deal with the crisis
  •  EasyJet said it may have to ground “the majority” of its fleet over COVID-19

Other big companies are also counting the cost of the outbreak. Paddy Power owner Flutter told shareholders this morning that earnings could drop by up to €122 million should the outbreak continue to restrict live sport until August.  

Something you might have missed

With SoapBox Labs, Patricia Scanlon is developing cutting edge voice technology to help children learn and play. Meet the woman pioneering a more natural interaction between kids and tech. 

With reporting from AFP 

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Note: This piece was updated with additional information at midday.