2009
The IEA, in responding to the Governments Supplementary Budget announced today (7th April 09) stated;
- The approach by the Minister is rooted in taxation to balance the books, without adequately addressing the underlying problem of our high public sector expenditure base, and the urgent need to facilitate trade credit finance and support the export enterprise sector.
- On the Ministers comments on Restoring the Credit System: The IEA are concerned that the Budget shows a lack of understanding of the full impact on export companies of this major economic crisis. The sorting out of toxic assets in the banks is only looking at one half of the problem, the other half where credit options are seriously curtailed for exporting companies has not been addressed.
The IEA chief Executive John Whelan stated:
"There has been a significant tightening of available trade finance due to widespread withdrawal of credit insurance. This is seriously affecting all exporting companies, resulting in lost export sales and will inevitably lead to job losses. It has also been recognised internationally by the WTO and recently at the G20 as a main cause of the collapse in international trade. They endorsed the intervention of State support as the way forward. The IEA is at a loss to understand why the Minister for Finance did not address this issue in his Supplementary Budget."
Referring to the Budget announcement of an Enterprise Stabilisation Fund, the IEA CEO stated;
"The Budget allocation for the Enterprise Stabilisation Fund at €50Million in 2009 and another €50 million in 2010 as the only support measures to facilitate export companies to maintain markets and the associated jobs is wholly inadequate and will do very little to prevent many very viable companies failing in the current climate. He further added "The Government appears to be out of touch with the export coal face as the number of workers already made redundant in Q1 '09 will cost the exchequer E100m in 2009 alone."
He went on to say
"Exports are hard won, harder lost but almost impossible to recover due to the costs of market re-entry and credibility reestablishment."
He concluded by saying:
"The cost to the State will be many multiples of the €100 million in social security and redundancy costs, as well as long term loss on tax revenue. It is essential that the Enterprise Stabilisation Scheme and the Export Credit Insurance facilities are revisited as a matter of urgency outside this Budget , if the Export -Led growth for the economy is to be realized, and a long drawn out recession is to be avoided."
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For further information contact:
John Whelan
087 9271243
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