Jack Quann
Jack Quann

11.40 23 May 2020


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An economist has suggested Ireland could adopt a French model to help small and medium businesses recover from the coronavirus crisis.

It comes after a new Local Jobs Alliance report called on the Government to set up a State agency with specific responsibility to grow and develop SMEs.

It is calling for solvency supports, fiscal grants, lower VAT rates, a commercial rates holiday for 12 months and a commercial rent scheme.

The alliance is an umbrella group of seven trade organisations, whose members make up 24,850 businesses who employ 448,000 people throughout Ireland.

Report author, economist Jim Power, said: "The agenda of an incoming government must include measures to nurture, support and grow the SME sector, which makes such a strong regional and national economic contribution, and which will play an essential role in re-building the economy.

"SMEs dominate the Irish economic landscape and account for 99.8% of the total number of business enterprises and 68.4% of total employment in the private business economy. "

He told Down to Business: "The SME sector really is the lifeblood of the economy, but particularly of the villages, towns, cities around the country where they really do create that economic vibrancy and sense of community.

He said legal issues around a commercial rents scheme means a new Government is needed quickly.

"That is the problem, and that's why it is absolutely essential that we get a permanent government in place as quickly as possible to implement primary legislation if necessary".

"The French have introduced this scheme called 60-20-20 - whereby the State pays about 60% of the rent for a 12 month period, the business pays 20% and the landlord takes a 20% cut in rents."

On landlords, he said "it is really important that they do engage" to keep businesses going and due to the "challenging" environment for the next 18 months after they re-open.

"I think if landlords do not come to the table on this and agree deals with all of their tenants, then a lot of those tenants will disappear forever and then they're left with zero rent and will find it very difficult to rent properties again".

He also said a scheme where the Government could become a shareholder in SMEs is an option "if the SME owners were willing to give Government a stake" in their business.

"I actually think that is much more suited to larger businesses then smaller ones.

"But it is a possibility."

"I think the bottom line here: the Government's stake in all of this really, Bobby, is to make sure that all of those - or as many of those businesses as possible - can re-open, that they can survive over the next couple of years of difficult trading circumstances in many situations and that they are in a position to rebuild the economy".

"I think the devastation that would be done to villages, towns and indeed cities around the country if a lot of these business go will be absolutely devastating".

Call for Ireland to adopt French model to help SMEs after COVID-19 crisis

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Main image: A HSE advice poster hanging in Temple Bar Square in Dublin, with closed and shuttered businesses in the background. Picture by: Leah Farrell / RollingNews.ie

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Commercial Rates Coronavirus Covid-19 Down To Business Government Jim Power Legislation Local Jobs Alliance SMES SMEs.ireland Supports

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