The State has fallen behind the curve with its emergency measures to boost the economy and needs to step up spending including wage guarantees that that may have to cover 70pc of salaries for half a million workers over 20 weeks, business group Ibec said.
he report came out after Aer Lingus said it was to halve pay for its near 5,000 staff due to the sharp drop in travel due to the coronavirus.
“Other countries have been much more aggressive in terms of State credit guarantees, with many countries putting measures in place which would, if necessary, reach 10pc of gross domestic product,” Ibec said in its report.
The State’s GDP was €340bn in 2019 so that would equate to a total package of €34bn if the 10pc figure was implemented.
At present, the Government has put in spending plans worth €3bn which includes up to €2.4bn in income support for workers.
“Significant measures will need to be put in place in Ireland in order to guarantee liquidity and prevent escalation of cash-flow issues throughout the supply chain,” Ibec said.
The Ibec numbers are based on a period of 20 weeks disruption and average net wage of €600 per week amongst impacted workers.
Germany, for example, has put together a package worth almost 20pc of its economic output versus 0.9pc here, the Ibec report said.
“All together this will require significant deficits by the State throughout 2020 and 2021 – with measures for Budget 2021 announced in October 2020 brought forward from their usual introduction in January 2021,” it said.