The coronavirus crisis now has its epicenter in Europe and the United States. On both sides of the Atlantic, the different governments are recharging their respective bazookas to face the economic impact that will happen to the isolation measures adopted in different countries. This is the volume of the packages of measures approved by the main powers:
Italy: 25,000 million for Employment and Health
The European country most affected by the coronavirus, is already looking to the future and has just approved a first package of 25,000 million euros to help companies and families. Among the most outstanding decisions 3.5 billion that will go directly to strengthen the health system and the Civil Protection system. In addition, others 10 billion will go to support employment and, especially, to the payment of unemployment benefits, as well as for a luck of 600 euros of aid this month for the self-employed. The Italian package also includes measures similar to the Spanish one, such as the freezing of the mortgage payment, for those affected by this crisis or the suspension of taxes and fees for companies. Access to credit will also be facilitated and special help will be given to sectors such as tourism. Now this is just Conte I.
France: no bankrupt company
The neighboring country will mobilize up 300 billion euros in its “war” against the coronavirus, to save thousands of companies from bankruptcy. Specific, the Gallic State will assume the payment of the credits bank contracts and will suspend both the payment of social contributions and the payment of taxes. It is also contemplated to suspend the payment of services such as water, electricity or gas, although the scope of the latter has not yet been delimited (to the entire population or only to companies, for example).
United States: record injection of liquidity
Even more spectacular is the American “rescue”. This same afternoon the President of the United States, Donald Trump, finished the Copernican turn of his policy and rhetoric regarding the coronavirus: from chascarrillo to concern. The polls await in November. For now, both the Federal Reserve and the US Treasury have announced this afternoon a liquidity injection of some 455,000 million euros (500,000 million dollars). For its part, the United States Treasury has created a line of credit of about 9,100 million euros ($ 10 billion) to support short-term corporate debt markets.
Germany: strong public support for companies
The German government is already rethinking its zero deficit dogma: in the European Union it supports “flexibilizing” the Cohesion Pact. Inside it will pull a checkbook. At the moment, with a much smaller number of positives than Italy or Spain, it will mobilize up to 500,000 million euros in the form of guarantees through the German Development Bank (KfW) for companies. Only 20 billion will be released initially. Also by law, access to public subsidies will be facilitated to support those who suffer cuts in their wages and working hours. In parallel, extended tax deadlines to facilitate the postponement in the payment of taxes, as well as delaying the payment of penalties until the end of this year. Similarly, early returns are made easier for taxpayers.
United Kingdom: 363,000 million in guarantees
The always controversial executive Boris Johnson would not delight the highly orthodox Margaret Thatcher. To a first stimulus package, approved a few days ago, by an amount of 34.3 billion euros it has been followed by a bigger announcement: £ 330 billion (about € 363 billion), 15% of UK GDP, in guarantees intended to support businesses. A support line of more than £ 5 million (€ 5.5 million) has also been approved for SMEs earning up to £ 1.2 million. In addition to suspend the payment of taxes in certain sectors such as tourism, retail or leisure, for businesses that are worth less than £ 51,000 and are provided with additional guarantees, among other measures. All this, join the promises made in the presentation of the latest Budgets, with the announcement that the British executive would assume the wage costs of those workers who decide to stay at home, for example.
Japan: strong incentives for SMEs
Japan’s economy is on the brink of recession and the Bank of Japan was among the first to promise liquidity injections and asset purchases, although it has not yet materialized. Between this Wednesday and Thursday its leaders are scheduled to meet. In parallel, the Japanese government is already on its second stimulus package. The latter of up 3,588 million euros (about 4,100 million dollars)in spending, aimed mainly at medium and small companies. For its financing, the Shinzo Abe executive must empty the rest of his reserve for the fiscal year (270,000 million yen).