Ireland is in a “hapenny place” when it comes to providing support for businesses in the aftermath of Covid-19 compared to other countries, a Sinn Fein TD has said.
Pearse Doherty warned that thousands of small businesses face closure unless the Government dramatically scales up financial support for small and medium-sized enterprises (SMEs).
Mr Doherty called for a more ambitious recovery package for SMEs; including direct grants, an extension of the commercial rates break and zero-interest loans.
Speaking at the Dail Covid-19 committee on Tuesday, he criticised the Government’s approach to date compared to other countries.
He said: “In Britain, the bounce back loan scheme has a draw down of 20 billion euro – multiples of what is drawn down here because there is zero interest applied in the first 12 months and zero capital repayments required after that, and 2% interest charged in the following months.”
“We as a State can borrow on the markets at negative interest rates, but are unwilling to pass that lending ability onto businesses which they need to survive and as many people can get back to work.”
Mr Doherty questioned why the Department of Business “has not decided to go down the route of other jurisdictions in terms of 100% guarantees”.
He said: “It would be worth submitting to his committee with a comparison of stimulus packages in European countries compared to Ireland. For example – Germany has announced a 1.3 trillion euro stimulus package or 30% of their GDP.
“We are in the hapenny place and as a result of that on a daily basis, businesses are telling me they are finished, hanging up and not going on any longer.”
In response, Secretary General of the Department of Business, Dr Orlagh Ryan, defended the handling of the crisis.
She said: “We certainly have not seen evidence of businesses giving up. In relation to the interests rates for businesses they are under negotiation at the moment.”
Enterprise Ireland has said the effect on its client companies due to Covid-19 is “unprecedented.”
Julie Sinnamon, CEO of Enterprise Ireland – a government agency responsible for the growth of Irish-owned businesses in global markets told the committee: “The impact of Covid-19 on our client companies is unprecedented. In addition, challenges such as Brexit and climate change will continue to impact on Irish enterprise on the months ahead.”