: What are the policy implications? M umssen: It is safe to say that the federal and local governments, and all state-owned enterprises, have no business collecting noncash revenues. But enterprises’ liquidity problems were hard to avoid at the beginning of transition. There was a strong negative demand shock, and thus a natural process whereby loss-making illiquid firms eventually closed down or restructured radically. Firms in those circumstances would temporarily resort to arrears and, possibly, to noncash transactions. We would not advise any government to
duration of support measures, while duly taking into consideration possible negative side effects . As staff writes, due to the extraordinary effects of COVID-19, some firms may be viable but illiquid right now. However, given the high uncertainty it is very difficult to assess that in the current environment. It would not be in the public interest to let generally viable but momentarily illiquid firms go out of business – which could also have negative effects on the financial sector – although support measures will be phased out in a gradual and well-sequenced manner
only viable firms with liquidity shortages. Over time, the emergency support measures aimed at preventing initial mass bankruptcies should be regularly adjusted in size and scope to ensure only viable but illiquid firms are supported. Subsidies for the most-affected industries should gradually transition toward new growth industries, such as those involving digitalization or climate change mitigation technologies. Prepare for an orderly phasing-out of exceptional support measures. Considering the magnitude of the crisis, unwinding the initial public interventions