Coronavirus: What aid packages have governments agreed?
March 25, 2020
Trillions of euros in financial stimulus to fight the global coronavirus outbreak have been unveiled over recent days and weeks. Financial authorities are saying this is just the beginning. Here's a look at some of the measures that have been announced.
Germany
The largest economy in the EU on Wednesday approved a coronavirus stimulus package worth over €750 billion ($814 billion), marking the first instance of the German government taking on new debt since 2013.
The fund, which German Chancellor Angela Merkel's Cabinet agreed upon on Monday, includes €600 billion for business loans and to buy direct stakes in companies and €156 billion in debt to finance higher social spending.
Finance Minister Olaf Scholz said the economy would need support even after the virus was contained.
France
Last week, France's finance minister unveiled a €45 billion aid package for businesses and workers, adding that more economic support was still to come.
France's national debt will exceed 100% of GDP in 2020, Finance Minister Bruno Le Maire said, significantly above the EU's guideline of 60%. The minister had previously described the fight against the coronavirus outbreak as an "economic and financial war."
EU
The European Commission has suspended debt and deficit requirements for members of the bloc, giving less economically-stable countries, like Italy, more room to fight the coronavirus. The European Central Bank announced the "Pandemic Emergency Purchase Program," a bond-buying scheme worth €750 billion to provide EU members with increased liquidity.
US
Lawmakers in the US agreed on a stimulus package worth $2 trillion in an attempt to keep the teetering US economy from falling into a recession.
The legislation provides grants for small businesses, significant loans for large corporations like airlines, and improved unemployment benefits for individuals. It comes with $130 billion earmarked for what top Senate Democrat Chuck Schumer called "a Marshall Plan for hospitals" and healthcare organisations, comparing it to the US aid program that rebuilt Europe following World War II.
The Senate and House of Representatives will officially vote on the bill later Wednesday. It will then go to US President Donald Trump to be signed.
Mainland China
Despite making its brutal, global debut there at the end of last year, China has yet to fight the coronavirus with the same economic force it did the global financial crisis in 2008 or the slowing Chinese economy in 2015. Still, the country’s central bank has increased available loans to banks by 500 billion yuan (€65 billion; $71 billion) and lowered bank reserve requirements, freeing up 550 billion yuan in cash to be lent out. It cut interest rates for banks and large corporations and Beijing has also asked banks to extend the terms of business loans and landlords to reduce rents on commercial properties.
The international community
Global bodies like the Group of 7 (G7) and Group of 20 (G20) have yet to offer a collective response to the pandemic, though on Tuesday G7 finance ministers said they were working on "substantial and complementary packages." The G20 is also discussing a possible response.
kp/ng (AFP, Reuters)