Cyprus-Forum.com

[Robin Hood]

Is it just me?

Although I have never owned a business as such, I always believed that in any business its survival was only possible if it had customers for whatever service or goods it was providing. In fact the customer is so important that it gave rise to the saying ‘The customer is always right!

Now because there is a pandemic caused by a virus that is killing people, and not for the first time in history has this happened, various governments have shut down their economy, closing thousands of small businesses down to prevent cross infection from people moving about. As a result people are losing jobs on an enormous scale as the businesses now have no customers and their employees of course are some other businesses customers ..... and the government’s response is to give the Banks £300bn to lend to small businesses. £300bn they seem very reluctant to spend.

Maybe it is my complete lack of business acumen but why would a business that had no customers want to borrow huge amounts of money from The Bank, to do what with it and simply add debt to their problems? You can pour as much aid into the business as you want but without customers the business is going nowhere!

So .... why do Governments not give the money to the customers directly, to spend straight into the economy by once more becoming paying customers of all these small businesses that need help?

Am I missing something here?

[cyprusgrump]

Is it just me?

Although I have never owned a business as such, I always believed that in any business its survival was only possible if it had customers for whatever service or goods it was providing. In fact the customer is so important that it gave rise to the saying ‘The customer is always right!

Now because there is a pandemic caused by a virus that is killing people, and not for the first time in history has this happened, various governments have shut down their economy, closing thousands of small businesses down to prevent cross infection from people moving about. As a result people are losing jobs on an enormous scale as the businesses now have no customers and their employees of course are some other businesses customers ..... and the government’s response is to give the Banks £300bn to lend to small businesses. £300bn they seem very reluctant to spend.

Maybe it is my complete lack of business acumen but why would a business that had no customers want to borrow huge amounts of money from The Bank, to do what with it and simply add debt to their problems? You can pour as much aid into the business as you want but without customers the business is going nowhere!

So .... why do Governments not give the money to the customers directly, to spend straight into the economy by once more becoming paying customers of all these small businesses that need help?

Am I missing something here?

You're missing the bit that, even if we had loadsafreemoney we're not allowed out to spend that money in businesses, large or small...

The whole thing is a mess and the cure will be worse for everybody than the disease IMHO...

[Kikapu]

I think the idea of giving money to businesses who are not allowed to commence with their business at this time, is to preserve that business with cashflow, a lifeline, so that they do not fold and that they will be there to return back to business as usual as soon as we are out of the present predicament with the virus.

Oh yes, it will be an added debt on these businesses for a long time to come.

[Paphitis]

Australia has gone all socialist in an effort to protect businesses and jobs at the other end of the crisis. Bear in mind, we have a right wing Government here.

What it has done is forced the Banks to hit the pause button on all mortgages - businesses and home borrowers. It's a good move considering the alternative.

It has also become law that any small business that is unable to pay their lease, the landlord is unable to evict that business or recover losses.

It has also subsidizing all salaries up to a value of $750 dollars per week for 6 months.

With regard to the big corporates that may need a bail out, the Government has decided it will bail out big business, in exchange for shares. For instance, Virgin Airlines has asked for a 1.6 billion dollar bail out. Government has decided to give hand over the 1.6 billion in exchange for shares in the company. Therefore, virging airlines will probably become a public asset as the Government could end up with controlling shares.

QANTAS in exchange has asked for 4.6 billion, and the same rules apply there. QANTAS doesn't really need this money as they are loaded. They just had a whinge because the Government is about to handover 1.6 billion to Virgin and their CEO said they should give them 4.6 billion just to even the playing field.

With regard to small business, Government has agreed to underwire a loan to them for $50,000 at an interest rate of 0.25% in order to cover leases and wages.

This may be a crisis, but it really has bought out the best in Australia and our people. Everyone is very happy with our leadership. Scott Morrison has really shown great leadership.

The idea behind all these policies is to look after big business who employ people so that they can continue when all the restrictions are removed post China Virus, and to also look after small family businesses so they don't fold, families, and home owners who have loans they can't afford anymore because both husband and wife lost their jobs because they are in hospitality or tourism.

Our Banks are very healthy and will survive despite plenty of defaults and non performing loans now and the pause in loan payments.

While there will be a recession, our economy is still ticking over. The Government won't shut the economy down and has deemed every worker that has a job an "essential worker" and stated they must press ahead as if life is normal as this war will be fought on 2 fronts - one front being the China Virus and the other front being the economy.

[miltiades]

I have on the whole been a " lucky" guy, apart from personal tragedies. If I was in business now I would obviously been closed like all other business. So I could say that in my opinion many businessess will fold. My son who is a music events promoter has had to cancell all his forthcoming venues. Nothing stopping him though, he bought him self a largish van and delivers essentials to hospitals. I wasn't impressed when he told me in view of the higher than normal risks in going into hospitals. But he is almost 48 and old enough to think for him self.
I just miss my daily ....fishing trips

[Paphitis]

Everyone is getting free child care as well so that the parents can go to work.

Plus, social security benefits like unemployment payments have been doubled.

There are restrictions though. Police are giving people a hard time unless they are shopping, going to a hardware store, doctor, government department or to work.

Can't cross from one state to another unless it's business travel.

[Get Real!]

Good point Robin…

Initially, our government was bragging about paying employers to cover the wages/salaries of all employees in quarantine; presumably for the initial 3-4 weeks which I assume came to pass, but when they then realized that this quarantine could go on indefinitely they soon changed their tune to ridiculous loans like you mention, which are not only nonsensical but in direct conflict with some of the emergency bank lending/repayment policies they introduced!

In a nutshell the whole thing is a true clusterfuck!

Eventually everyone will declare bankruptcy… the government will bail out as much and as many as possible and in turn go bankrupt itself!

The only bright future ahead is for the handful of massive international lending institutions.

[Maximus]

Those business's that need the money probably wont have any customers until this is over. For them, it is a matter of survival until their customers return.

Giving the money directly to the customer to spend on business will only benefit a select few types of business anyway. What would probably happen is that people will save as much of it as possible and spend it only on necessity and essential items. Like food, accommodation and utilities.

[Robin Hood]

Those business's that need the money probably wont have any customers until this is over. For them, it is a matter of survival until their customers return.

Giving the money directly to the customer to spend on business will only benefit a select few types of business anyway. What would probably happen is that people will save as much of it as possible and spend it only on necessity and essential items. Like food, accommodation and utilities.

But for an Island like Cyprus how will all the small businesses get their customers back unless the customers have a job ..... or an income. The non-performing loans are going to rocket unless people can get back to work or the State writes off all the debt and provides a Universal Basic Income.

The big businesses will only recover when the small businesses start creating wealth by employing people to produce the essentials. Once people have the relative security of a guaranteed 'survival' level income they will be more prepared to spend more. Spending more into the economy boosts the economy. Giving money to Banks to loan into the economy creates debts.

This situation has been building up for years and at last maybe we will see the Banks put back into place as a service to commerce and industry rather than an 'industry' in its own right that produces nothing but debt. The big problem for Cyprus is that it has absolutely no control of its monetary system ....... they are servants of the ECB.

[Maximus]

When the chain of transmission is broken and there are no new cases,

Hopefully things should return to normal in a relatively short period of time.

That is why it is important for everyone to remain isolated for a few weeks. To protect ourselves and each other and so we have a better chance of limiting the overall damage.

Its only a few weeks. in the grand scheme of things, it is (potentially) nothing but a boring holiday at home alone.

Unfortunately, some people wont and haven't made it though.

May they rest in peace.