Brexit has very much taken a back seat to Covid-19 as the UK combats the crisis.
For UK hospitality businesses it seemed the end of Freedom of Movement would be the highest exit price. As Covid-19 puts paid to that concern, non access to an emergency fund from the EU could move into its place.
The UK Government has taken significant financial and fiscal steps to lessen the impact from Covid-19 for the UK hospitality industry. Most has taken the form of loans or payment holidays, that of course need to be repaid. So, whilst these steps do temporarily ease cashflow, they do not in the fullness of time improve balance sheets.
France and Germany last week proposed a fund of €500 billion designed specifically to help sectors most impacted by the coronavirus pandemic. Hospitality and tourism head the list.
The proposed fund is to be raised and distributed by the EU’s executive body, the European Commission, and delivered as grants to tourism, travel, and hospitality. The details of the distribution were not made, but the focus is to assist sectors particularly damaged by Covid-19 lockdowns.
The proposals were championed by German Chancellor Angela Merkel alongside French President Emmanuel Macron. The EU itself has not yet officially responded or put forward its own relief plan, but is expected to this week.
The key difference between the relief package proposed by Emmanuel Macron and Angela Merkel, and the expected package response from the EU, is in providing grants not loans. The grants would be made by and paid back from the EU.
The proposal has been met largely with approval by financial commentators and many have likened it to a 21st century Marshall Plan. An economic package designed to save the European economy post-World War II.
The Marshall Plan was implemented and funded by the US to bail out European economies that were ravaged by World War II. It provided $15 billion to help Europe rebuild infrastructure destroyed during the war.
The proposal doubtless would not have been announced unless the German Chancellor and French President were confident it would be approved and pass.
It will be interesting to see if the UK Government follow the example of investment by the EU in the core industries that not only support the EU, but finance it.
hospitality miss Marshall Plan