These numbers are subject to significant margins of error and only can be considered illustrative at this point. The scale of intervention to keep the level of permanent job losses as modest as possible will be significant, and the long-term debt repayment arduous. However, this is a global problem and the island will not face any significant backlash from doing too much or helping too quickly. Money will be available to borrow according to the ECB and the Bank of England. The Republic of Ireland will not face the same escalating cost of borrowing as it did in the financial crash.
At present policy is focused on ‘bridging’. We can see the other side of this crisis – we are just not sure how far away it is. Perhaps the gap will prove too large to bridge with the current policy responses and further intervention will be required, but priority number one for now is to keep businesses viable for when the crisis abates.
Cash to citizens is recommended by some, and the US is intending to go down this route, but with the majority of local spending choices closed, personally I do not think this is the best use of a finite pot of money – at least not now. Savings would increase and the money would not circulate fully in the economy. This is a societal problem and it is my view that the debt burden falling on to all citizens through government borrowing is probably better than onto firms or individuals themselves.
Many of the island’s smallest firms understandably would be nervous at the prospect of taking on major levels of debt, with no certainty of an end date to the crisis. We will all need to make an effort to support our local businesses when the time is right and we also need to think about those who have lost a job or a business during this difficult time. They will face their own pressures and stress over the coming weeks, meaning they too are vulnerable.
Unquestionably, these are difficult and stressful times, but amongst all the trauma, there are positives and uplifting lessons to be learned.
- Our collective respect for healthcare workers has risen immeasurably – they have been the heroes of the crisis globally
- We are a global economy - interlinked and co-dependent. Hopefully we will be inspired to embrace many of the world’s challenges as a global family, just as we are tackling this one. We do need to be mindful of any increase in citizens’ desire for more protectionist or insular policies as pandemics do not respect borders
- Firms and people are resourceful. Businesses have pivoted, changed what they do and how they do it. Some of the lessons learned will be valuable going forward including how to work remotely, how to use technology effectively and how to deal with crises. Our ways of purchasing may never revert to the way they used to be, with online now the norm
- Streets have been quieter, and pollution has reduced. There may be lessons to learn from this. For example, how to operate a more flexible and less time-dependent economy for the benefit of production and the planet. Staggered school starting times, working hours and working from home on a more regular basis could be good examples of this
- For many people, myself included, this has afforded time at home with family without many of the usual activities available. This has brought its challenges (home schooling is harder than I thought and live sport is a helpful distraction!) but it has been a reminder of what really matters
- Governments can respond. They have moved rapidly and implemented responses that would have seemed unimaginable a few months ago. There have been criticisms in certain areas, but policy makers have moved swiftly and shown a fleetness of foot and adaptability that, hopefully, will remain part of their approach to future challenges
The economic implications across the island are going to be very challenging, but they pale in comparison to the human cost. Many citizens across the island will inspire us over the coming months as they keep the country moving and work to find solutions to the Covid-19 pandemic. For the rest of us, let’s be ready to spring back into action when the opportunity allows and work hard to get things back up and running. Then we can talk about the long-term implications for the economy and society. As species, we are vulnerable, but, thankfully, also resourceful, imaginative and capable.
Stay safe, look out for others and thank you to those keeping the island functioning at this time.