Financial Stability Review evidence that pandemic supports must continue

16 June 2021

Commenting on the Central Bank’s Financial Stability Review, Labour finance spokesperson Ged Nash said:

 “This has been an extraordinarily hard time on people and families. It’s clear from the Central Bank’s review that the economic supports for those impacted by the pandemic have been vital in absorbing the shock to households. The Government must now extend these supports and ensure that there will be no cliff edge. While many businesses have reopened in recent weeks, not all businesses will come through this period unscathed. Some may need a set of stabilisers and targeted sippers to become viable again. The Government needs to take a strategic approach and protect jobs, protect businesses and protect families.

“The financial supports should be extended out to the end of the year at a minimum, as we can’t yet predict what will happen over the next six months, but we shouldn’t take the risk of further damage being incurred. What we do know from before though is that people want to, and will go back to work, as over 400,000 workers returned to their jobs last summer when the economy partially reopened then. It would be dangerous to rapidly ration people off the supports that have maintained our society and a floor of decency over the last year.

“Now is also the time for us to reimagine the employment wage subsidy scheme (EWSS) by taking a leaf out of the German Kurzarbeit model, and make it a permanent feature of our labour market model and allow continued supports to be provided to, for example, the stricken aviation sector or sectors like hospitality that won’t have a full summer tourism season.”

Noting the Central Bank’s update on mortgage measures, Deputy Nash said:

“The update on the Central Bank’s mortgage measures are welcome. Last October, I lifted the lid on the sharp practice of Banks – including banks in which we have significant stakes such as Permanent TSB, AIB and Bank of Ireland – who are asking mortgage applicants whether their employer is availing of the EWSS. Numerous people have reported that the primary reason for rejection of an application or drawdown is that the ‘employer is registered on the EWSS’.

“Only recently I wrote to the Central Bank again about the fact that some people applying for a mortgage whose employer has received Covid-19 supports are being effectively blacklisted. In some cases, banks are performing U-turns on individual cases, but only when pressure is applied. This issue desperately needs to be addressed along with extending the term of mortgage approvals and ensuring that banks inform customers of all options for mortgage arrears.”

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