Covid supports to extend beyond March, says McGrath
The Minister for Public Expenditure and Reform has confirmed that the various pandemic supports will be extended beyond the end of March.
Speaking on RTÉ’s News at One, Micheal McGrath said the Government will set out its new plan next week as regards Covid-19 and “a line of sight” for people, businesses and households in relation to the vital supports that are there at this time.
He said provision has been made in the budget for 2021 of around €5.5 billion for a contingency fund and a recovery fund, while €6.5 billion has also been allocated to different departmental budgets for Covid related costs.
Mr McGrath said because of the current restrictions, this provision of around €12 billion is being used up, but he said the Government believe it’s the right thing to do to continue with these supports.
While the Minister said this level of support can’t continue indefinitely, he added that these supports would continue for “as long as is necessary” in line with public health restrictions.
He said the eventual withdrawal and tapering off of supports will have to be done in tandem with the public health environment in “a very careful and gradual way”.
Mr McGrath said the country’s public indebtedness is “rising significantly” as a result of the pandemic.
He said at the start of last year, the country had a debt of around €200 billion.
By the end of this year, Minister McGrath said this will be north of €235 billion, however, he said they were availing, to the maximum extent possible of the very favourable borrowing conditions, by re-financing their debt and availing of the longest possible maturity.
“While our stock of debt is rising, the cost of servicing it is falling and the average interest rate is falling,” he said.
“It is our view that the re-opening of the economy eventually, when it is safe to do so and getting people back to work, will do the bulk of the heavy lifting when it comes to closing the budget deficit.”
He said they’re being advised by both domestic and international bodies, including the European Central Bank and the European Commission that the Irish Government and other Governments need to continue providing these supports because of the lifeline they are providing to the Irish economy.
He said “the borrowing conditions are favourable at the moment” and they’re taking maximum advantage of them to put themselves in the best possible position over the next number of years “that we won’t be facing a cliff edge in terms of re-financing”.