The Chamber of Commerce has urged the government to help companies weather the storm caused by COVID-19 coronavirus.
It said the government should:
- Introduce tax breaks or tax deferrals (in the form of corporate, VAT or excise duties) for companies;
- Delay payments of commercial utility bills;
- Launch talks with the major commercial banks to either suspend commercial loan repayments for those segments affected or itself offer to act as a guarantor through, for example, the involvement of the Malta Development Bank;
- Any late payments owed to private enterprises involved in public procurement contracts should be paid without any further delay;
- Establish a national emergency fund to offer state aid to companies which are already facing difficulties in terms of liquidity such as English Language Teaching, hospitality, restaurants and all food and beverage suppliers;
- Offer assistance to companies similar to what was offered during the 2008/09 economic crisis and 2011 Libyan crisis when companies cannot retain their employees on a 40-hour week
The Chamber also called on the government to push for a concerted effort at European Union level to establish a Corona Response Investment Initiative.
ECB eases capital buffer rules for banks amid virus stress
Earlier on Thursday, the European Central Bank loosened capital buffer rules for banks to keep lending going during the coronavirus outbreak that has dealt a "significant shock" to the global economy.
The ECB said it would allow banks to have capital buffers that are "temporarily below" levels currently required under the so-called Pillar 2 requirements.
In addition, they will be allowed to partially use equity or liability instruments that normally do not qualify as the highest quality category of capital known as Common Equity Tier 1, to meet the requirements.
Separately, the European Banking Authority said it was postponing the 2020 stress tests on banks to 2021.
"The coronavirus is proving to be a significant shock to our economies. Banks need to be in a position to continue financing households and corporates experiencing temporary difficulties," said Andrea Enria, Chair of the ECB Supervisory Board in a statement.
"The supervisory measures agreed today aim to support banks in serving the economy and addressing operational challenges, including the pressure on their staff."
The eased rules will be particularly welcomed by Italian banks, which are under massive pressure as the country is now the worst-affected by the coronavirus outside China.
Italy's government has announced a 25 billion euros ($28 billion) package to rescue the economy, with part of the cash injection aimed at helping small businesses that are suffering the brunt of an implosion in the number of tourists who visit the country.
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