US, WASHINGTON (ORDO NEWS) — The coronavirus pandemic affects a considerable number of countries. More than 246,000 people have been infected in 161 states and territories since December and more than 10,000 have already died, according to the latest assessment established from official sources by AFP, Friday, March 20, Business Insider reported.
Measures restricting movement, closing places considered non-essential (bars, restaurants, cinemas …) and confining populations are increasing. As a result, economic activity is slowing down, when some sectors simply don’t come to a halt.
To support the various players in the economy and reassure businesses, governments around the world are each announcing emergency plans and consequent budgetary measures. Added to this are the decisions taken by the central banks, which inject massive amounts of money by buying up government and corporate debt and set up favorable arrangements for banks to ensure that they can always lend well.
The European Central Bank announced on Wednesday evening a new asset repurchase program in the amount of 750 billion euros, which is in addition to the 120 billion already put on the table on March 12.
Overview of the measures to support the economy announced so far by several states in Europe and worldwide:
In France, the State mobilizes € 45 billion and guarantees € 300 billion in business loans.
The French government is granting relief, postponement or cancellation of charges in the amount of 32 billion euros in March alone. What constitutes the main part of the 45 billion euros of “immediate” mobilization, announced Tuesday March 17 by the Minister of Economy Bruno Le Maire. It also widely opened the partial unemployment scheme and set up a solidarity fund endowed with around 2 billion euros. Small businesses and micro-entrepreneurs in difficulty will benefit from a suspension of the payment of their bills for water, gas, electricity and rents, Emmanuel Macron announced on Monday March 16.
The state will also guarantee up to 300 billion euros in loans granted by banks to companies affected by the coronavirus crisis, and has not finally ruled out directly supporting some of them via intervention to their capital.
In Germany, loans will be guaranteed up to € 550 billion and more if necessary.
Germany announced on Friday March 13th the largest business assistance plan in its post-war history, with “no limit” loans worth at least 550 billion euros to start with. As of March 9, it had announced a package of measures to support the economy, including for businesses in difficulty the easy use of short-time working for their employees, the granting of loans in the event of cash flow difficulties and the release of an additional € 12.8 billion over four years for the transport, housing construction and digital sectors in particular.
The government also announced fiscal easing measures, such as more favorable depreciation rules.
In Italy, the government has released an envelope of € 25 billion.
Italy, the country most affected so far by the epidemic within the European Union, broke its piggy bank and announced 25 billion euros to fight the epidemic. Rome will use its envelope to help Italian borrowers, in particular through the suspension of payment of certain mortgage and bank loan maturities.
More specifically, “more than 10 billion euros will be used to support employment and workers,” said Minister of Economy and Finance Roberto Gualtieri. And 3.5 billion euros will finance the national health system and civil protection, on the front line in the fight against the epidemic.
The Italian government also said it was going to inject liquidity into the financial system, without giving an amount. And he assured that additional measures would be adopted in April.
In Spain, ‘up to 200 billion euros’ must be mobilized.
The Spanish state will guarantee up to 100 billion euros in business loans, Prime Minister Pedro Sanchez announced on Tuesday (March 17th). Among other measures, it will facilitate the use of plans for “temporary suspension of employment”, a form of partial unemployment which allows the employee to then return to his business. The self-employed will have easier access to unemployment benefits.
In addition, 600 million euros will be used to finance aid for the most vulnerable, such as the elderly. And the head of government announced a “moratorium on the payment of mortgage loans for the most vulnerable people”. In total, “we will mobilize up to 200 billion euros,” assured the socialist leader.
In the United Kingdom, the State guarantees € 333 billion in business loans.
The British government promised Tuesday to support the economy “whatever the cost”, announcing state guarantees on business loans up to 330 billion (333 billion euros) and aid reaching 20 billion pounds (22 billion euros). A week earlier, the UK announced budget support of 30 billion (€ 33 billion). In detail, 12 billion pounds will be a direct response to the immediate consequences of the coronavirus, some 7 billion will help the self-employed and SMEs, while 5 billion will support the health system.
In addition, the Bank of England decided on Thursday to further cut its policy rate from 0.25% to 0.1%, the lowest in its 325-year history. The institution has also relaunched a share buyback program for 200 billion pounds (215 billion euros).
In the United States, a $ 1,000 billion plan put forward by Donald Trump.
The American Congress adopted on Wednesday a first plan of social assistance of approximately 100 billion dollars (93 billion euros), intended for the workers directly affected by the impact of the coronavirus. But U.S. President Donald Trump is campaigning for a much larger plan, as high as $ 1 trillion ($ 931 billion), to counter the impact of the pandemic in the United States.
The head of the Republican majority in the Senate, Mitch McConnell, presented these economic stimulus measures on Thursday. The text must now be submitted to negotiations with the Democrats, before a vote date can be set and it can be approved by the Democrat-majority House of Representatives.
In addition, American taxpayers will have until July 15 to file their tax returns, instead of April 15, US Secretary of the Treasury Steven Mnuchin announced on Twitter on Friday. “Additional time to file their taxes and pay them without penalties or fines,” he wrote.
Finally, the Fed lowered its rates to zero on March 15. The last time the US central bank lowered them to such a level was in December 2008. It also resumed its asset repurchase program for $ 700 billion, including $ 500 billion in bonds. Treasury and 200 billion mortgages. There are many different types of loans for American individuals. For instance, physicians have access to physician loans, they can compare these online for the best deals. For example, a Huntington Bank physician loan may be better or worse than the next. People may want to search the difference to know they are getting the best outcome. Furthermore, individuals needing to secure a business loan during this time should perhaps consider the likes of usda b & i loans.
In China, the government facilitates credit to inject tens of billions into the economy.
The Chinese central bank, which released extensions or renewals of business loans at the end of February, announced on March 13 a drop in the reserve ratio of banks, freeing up 550 billion yuan (70.6 billion euros) for support the economy. This ratio, which obliges banks to keep cash with the central bank, has been lowered by half a point to one percentage point. The last decline dates back to January 6. Beijing had then reduced the reserve requirement rate by half a point, injecting around 100 billion euros into the economy.
In Japan, the central bank is strengthening its asset purchases to exceed € 100 billion.
The Bank of Japan (BoJ) significantly strengthened its asset repurchase policy on March 16. The monetary institution has not changed its rate on banks’ deposits with it, riveted to a negative level (-0.1%) since January 2016, but it has in particular doubled its annual ceiling for redemptions of negotiated funds on the stock market (ETF), raised to 12 trillion yen (101 billion euros) against 6 trillion yen previously. Still to guarantee abundant liquidity, the BoJ also announced a new short-term loan scheme – maturing in one year maximum – and at zero rate, active until September. These loans will be granted in exchange for corporate debt securities as collateral.
Previously, the Japanese state had released an envelope of 13.4 billion euros to grant interest-free loans to small and medium-sized enterprises.
In Brazil, € 26 billion is to help SMEs and low-income families.
The Brazilian government announced on March 16 a plan of 147.3 billion reais (26 billion euros) to support the country’s economy in the face of the coronavirus pandemic. An amount that should be used to support small and medium-sized businesses, low-income families and retirees over the next three months, said Economy Minister Paulo Guedes during a press conference in Brasilia. The government of President Jair Bolsonaro had already adopted the previous week an emergency plan of 5 billion reais (933 million euros) for the health sector.
In Turkey, the president announces a support plan of € 14 billion.
President Recep Tayyip Erdogan announced on March 18 a 14 billion euro plan to support the economy of Turkey in the face of the negative economic consequences of the Covid-19 virus. Among the measures unveiled by the Head of State include tax cuts for businesses and financial assistance for low-income households.
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The article is written and prepared by our foreign editors from different countries around the world – material edited and published by Ordo News staff in our US newsroom press.