As the spread of the coronavirus in Europe continues on, U.S. policymakers and business owners have a small amount of time to learn from Europe’s success (and failures) in the fight back.
This will be most evident in the economic stimulus and reassurance measures employed by European finance ministers to save jobs, reassure businesses and lessen the burden on those who have left work to care for others.
Here’s what we know so far about the economic measures in place across Europe:
The U.K.’s recently-appointed Chancellor Rishi Sunak announced a massive “whatever it takes” package amounting to 15 percent of UK GDP and worth a near $400 billion total (£330 billion).
He added: “I want to reassure every British citizen, this government will give you all the tools you need to get through this.”
+Government backed loans of £330 billion ($398 billion) to support companies
+A three-month mortgage payment holiday for homeowners
+Funding grants of up to £25,000 for smaller businesses
+An extension of the business rate holiday announced in the Budget (important for shops and local businesses–likeable to a local business tax)
Germans like to balance their budget but their export led economy will be hit hard as trade volumes slow.
Finance Minister Olaf Scholz has described the amount of cash he’s willing to spend as a big “bazooka” to avert a crisis in the eurozone’s largest economy.
On Friday he promised unlimited liquidity assistance to German businesses affected by the pandemic.
But as will all things in the eurozone, this isn’t merely an economic issue.
One of the big debates (once again) is just how much of the economic burden Germany will be expected to carry for some of its less robust European (and Eurozone) partners.
The New York Times describes this as a “politically sensitive topic” in Germany, citing Sven Giegold, a member of the European Parliament, who claims, “It is not enough to save German businesses and at the same time send Italian companies into bankruptcy.”
Expect renewed calls for Europe to create a common debt repayment fund.
Expect France to be all for it, but Germany less so.
The Guardian’s Marchel Alexandrovich has already described Italy as “Europe’s canary in the coalmine for the post-Covid economy.” Italy’s economic fundamentals really are poor, with GDP growth reportedly only 5% higher than it was in 2000. By comparison, France he writes, is at 29%.
Italy is second only to China in the number of diagnosed cases, with over 2000 deaths and climbing.
However the government has acted, announcing progressive measures to “strengthen the national health service and economic support for families, workers and businesses.”
+Italy’s government has approved a $28 billion emergency package for everything from the health system to small businesses
+Included in this is $3.8 billion for the beleaguered health sector
+$650 million on renationalising airline, Alitalia
France has pushed an economic package worth nearly 2% of gross domestic product, according to Reuters. However the push comes with a caveat that such sums will inevitably push the national debt over 100% of gross domestic product.
+France’s government is pledging $50 billion in emergency aid for small businesses who have lost out during the pandemic
+French Finance Minister Bruno Le Maire announced further tax breaks and a “solidarity fund” for struggling small businesses in France
Spain is on lockdown after declaring a state of emergency on Saturday which places tight restrictions on movement. Big cities have been described as “eerie.”
The Spanish government failed on Saturday to agree economic measures to push back against the impact of coronavirus.
Pedro Sanchez, Spain’s prime minister described his government’s plan as the “biggest mobilisation of resources in Spain’s democratic history.” The government’s commitments total €200 billion ($220 billion).
Included in this are:
+€100 billion ($110 billion) of state loan guarantees, giving greater liquidity for all Spanish companies
+A moratorium on mortgage payments and utility bills
+€600m ($658 million) to help vulnerable people and those depending on social services
One of the first to react on Monday morning, Norway has confirmed that its Parliament agreed on a crisis package for the economy.
In a statement Finance Minister Jan Tore Sanner said that “the Norwegian economy is fundamentally solid. We have a good starting point. Unemployment is low, we have profitable businesses and solid banks, and we have room for manoeuvre in economic policy.”
Norway has announced:
+Those who are temporarily laid off will receive full pay for 20 days
+The freelancers and the self-employed will receive up to 80 percent of the average of their pay over the last three years, limited to $57k
Over 1,000 cases reported and seven fatalities linked to the new coronavirus.
+Swedish economic measures worth $30 billion have been announced to protect companies and workers and the new measures include rules for temporary layoffs, under which, ENCA agency news report, the government would shoulder a bigger share of the pay for staff made temporarily redundant.
Finance Minister Magdalena Andersson told a press conference, “This is a completely unique situation for Sweden’s economy… We want today’s announcement to enable as many companies as possible to make it through this crisis.”
On Monday, President Volodymyr Zelensky unveiled plans to swiftly seek financial assistance from the International Monetary Fund.
But there’s a cash crunch. The Financial Times’ Roman Olearchyk in Kyiv reports that Kateryna Rozhkova, deputy head of the National Bank of Ukraine, said “There are certain difficulties with the availability of cash dollars [at banks], but this is linked only with foreign currency cash having been brought in from abroad to the bank sector by airplanes.”
Never ones to panic, Prime Minister Mark Rutte’s televised speech to the nation on Monday was the first time a Dutch PM had addressed the nation since the oil crisis in the 1970s.
In his speech Rutte said that all areas of the economy had been impacted, “The lady with the coffee bar on the corner, the flower grower, the independent haulier, the self-employed person …. Many businesspeople suddenly have their backs to the wall.
“My message to all business owners in the Netherlands and to all their employees is this: the government will do what is necessary to support you. We will do everything in our power to ensure that companies do not go under because of this crisis, and that people do not lose their jobs.”