Covid supports for businesses likely to be extended until mid year, says Donohoe

Staycations within Ireland will be the main support for the tourism sector this summer, and Government pandemic help for businesses is likely to continue to be needed for the first half of the year, Minister for Finance Paschal Donohoe has said.

Mr Donohoe was speaking after leading a video conference of the Eurogroup, at which the finance ministers were briefed on the outlook for the Covid-19 pandemic by the World Health Organisation's emergencies chief, Mike Ryan.

Mr Donohoe said the briefing had revealed a “high level of uncertainty” about what lay ahead given the emergence of new variants of the disease, but that progress in vaccination “raises the prospect for gradual change” and that economic growth should return along with a gradual reopening of the economy in the second half of the year.

Economic supports would remain “as long as they are needed”, Mr Donohoe told reporters. “There is an inherent risk in withdrawing support too early.”

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Asked about whether supports including the employment wage subsidy scheme, pandemic unemployment payment, Covid restrictions support scheme and commercial rates waiver would be extended past March when they are due to expire, the Minister said there would not be a “cliff edge”.

“The Government has not made a decision in relation to will they be extended beyond March but we will be doing that soon, and I think it’s fair to say at this point that we recognise that additional support will be needed for the economy between now and the summer,” Mr Donohoe said. “There will not be a cliff edge.”

Tourism prospects

Asked about the prospects for travel and the tourism sector during the summer, he said: “I do expect that the summer in Ireland will be primarily supported by domestic tourism. The Taoiseach and the Tánaiste have said that any change in public health restrictions will be gradual, and therefore I do believe that the main support for tourism in Ireland across the summer will be from domestic tourism.”

Among the issues discussed by the finance ministers was whether pandemic supports could prop up businesses that are insolvent and no longer viable, and how governments could distinguish between firms with a future and those that should be allowed to fail.

Over time, government programmes should be tailored to become "more targeted" to favour companies that had a future, the European economy commissioner Paolo Gentiloni said. He added that how to identify which firms were still viable was a "difficult question" but that it depended on what the long-term impacts of the Covid-19 pandemic were on the economy, and would be up to national governments to design.