Coronavirus: 'Courageous' decisions required to stop businesses collapsing
The President of the Federation of Israeli Chambers of Commerce has called on the Finance Ministry to inject "a lot of money" to help Israeli businesses cope with the impact of coronavirus.
By EYTAN HALONFederation of Israeli Chambers of Commerce president Uriel Lynn(photo credit: YAIR SAGI)
National authorities must swiftly make "courageous and intelligent" decisions to ensure that businesses do not collapse as a result of the coronavirus outbreak, a leading Israeli business official warned on Monday."We have all understood that the coronavirus crisis is not something that will disappear in the coming days, or even the coming weeks," said Uriel Lynn, president of the Federation of Israeli Chambers of Commerce, at an emergency meeting of retail industry leaders in Tel Aviv."National authorities must make courageous and intelligent decisions, and quickly. I had a meeting with the Economy Minister yesterday and saw a willingness to cooperate, but I have not seen an operational plan addressing the problems faced by the business sector."Lynn said it would be necessary for the Finance Ministry to inject "a lot of money" to ensure that businesses do not collapse, dismissing allegations that retailers had deliberately generated panic to increase sales.Key issues currently harming local businesses and requiring government intervention, Lynn said, included sea freight stranded outside Israeli ports, excessive red tape on imports, cash flow shortages and sick pay for quarantined workers.According to Amir Shani, deputy president of the federation, there are currently 44 cargo ships waiting outside Haifa and Ashdod ports, delayed due to confusion over Health Ministry travel restrictions."On Saturday, I begged the port managers to bring in the ships, which are carrying meat, eggs, medical supplies and more," said Shani. "There is a lack of consideration for all those who spent their best money on the goods, whose shelf life is limited."Shani also warned of the commercial damage that could result from the government's decision on Monday evening to require quarantine for all arrivals from abroad, stating that 60% of air cargo destined for the country arrives on passenger planes."We do not want to reach a situation where one of the stronger companies is able to send planes for themselves, and other businesses will be wiped out," said Shani.Federation representatives also called on the government to commit to a compensation package previously rolled out for businesses in Northern Israel affected by the Second Lebanon War. The federation proposes compensation to be made available for businesses suffering a 25% drop in revenues for two consecutive months, similar to measures announced in Italy last week.Responding to the government's blanket quarantine decision, Israeli airlines Arkia and Israir said they were halting all international operations.Arkia has stopped international flights with immediate effect, putting approximately 150 members of staff on unpaid leave. Israir will work to bring back all customers currently abroad by the weekend, before stopping flights until the end of March.Both airlines will continue their domestic operations, shuttling customers between Ben-Gurion Airport and Eilat's Ramon Airport.Speaking to Army Radio, Histadrut labor federation chairman Arnon Bar-David attacked the government's response to the outbreak, stating that he was "very worried" about a lack of economic leadership on a national level to manage the incident."We are not seeing real solutions - we are seeing declarations about establishing funds, but not seeing cash flow and immediate solutions," said Bar-David, adding that the Israeli economy will face an "unprecedented" situation should hundreds of thousands of workers be required to enter quarantine or be sent on unpaid leave."We need to be ready for this. I don't see a leader standing up and saying: we are taking care of this," Bar-David said.Bank of Israel Governor Prof. Amir Yaron also convened a special meeting with heads of Israel's seven banks on Monday to assess their ability to support business activity in light of the coronavirus outbreak. Yaron urged the banks to ease their credit policies in order to assist healthy businesses with temporary cash flow problems, and enable the economy to overcome its current difficulties.Should the crisis subside by the end of the second fiscal quarter, the bank estimates that the outbreak will reduce GDP growth by approximately 0.7% during 2020."The banking system is robust and it is essential for banks to find the right balance between a responsible credit policy and the financing needs of the economy," said Yaron. "Especially with regard to the business sector, and with an emphasis on small and medium businesses."
