EU urged to ‘act fast’ to avoid ‘unprecedented economic hardship’

Covid-19 will cause unprecedented economic hardship unless the EU acts rapidly and in unison, according to the Irish Cattle and Sheep Farmers’ Association (ICSA).

Commenting on the matter today, Monday, March 16, ICSA president Edmond Phelan underlined the severity of the situation – both socially and economically.

‘Decisive action’

“While the immediate focus is on saving lives and slowing the spread of the virus, we also need clear and decisive action to mitigate the potential for economic catastrophe,” he said.

ICSA is calling on the Taoiseach, working in concert with other EU leaders, to insist on a massive programme of quantitative easing – increasing the money supply in the Eurozone – by the European Central Bank (ECB).

Phelan noted that “these are not normal times”, adding that it falls on the EU heads of state to make “whatever changes are necessary”.

“This is not a time for the ECB to fiddle while Europe burns. We have seen how the ECB decision-making process left a lot to be desired under Jean Claude Trichet during the economic crash.

“We cannot allow indecision to cause massive suffering across Europe and, in recent days, we have seen Italy turn to China for help, apparently frustrated at the lack of decisive EU assistance. This is not acceptable.

The normal reason to oppose quantitative easing is inflation but there is no risk of that as economic activity collapses.

The president highlighted that the impact of the coronavirus is already widespread, pointing to the closure of bars and restaurants and the impact on working patterns.

“VAT and payroll taxes will be down substantially while social welfare and health spending will escalate.

“In that scenario, we need extra money to cover all of the escalating national exchequer requirements and we need member states to be able to fully fund the Common Agricultural Policy (CAP) as well,” Phelan argued.

Brexit

Turning to the ongoing issue of Brexit, the president said that negotiations should continue regardless of the coronavirus.

“It is also vital that the work of negotiating an EU/UK trade deal goes ahead.

We simply cannot afford to put this on the back burner and it is surely possible to manage the negotiations by way of small teams observing strict distancing and high-tech video conferencing.

“Brexit has caused enough disruption and the unfortunate deadline imposed by the UK means there is no room for delay,” he concluded.

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