European governments prepare to step in to protect economies from coronavirus impact

28 Feb 20

European finance ministers are considering intervention in their economies to counter the impact of coronavirus outbreaks.

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Roberto Gualtieri and Bruno Le Maire with Christine Lagarde. (Alexandros Michailidis / Shutterstock.com)

Italy’s Roberto Gualtieri met with his French, German and Portuguese counterparts to discuss how to protect businesses, especially in industries that are particularly reliant on tourism, which is already being affected by the virus.

Hundreds of cases of coronavirus have been confirmed in Italy in recent days, mostly in northern regions of the country, parts of which rely heavily on tourism.

In an interview with Italian newspaper Leggo published today, Gualtieri said the government is putting just as much effort into protecting the economy as it is into protecting the health of its citizens.

“We are putting in place measures that can support citizens and businesses within the areas most affected by outbreaks, but also companies in the sectors most directly affected by the consequences of the crisis,” he said.

The government is preparing a “large and meaningful package” of interventions, he said, including extending a fund to guarantee SMEs retain liquidity, providing support for Italian exports and expanding unemployment benefits.

Elsewhere in Europe, there are many other confirmed cases of coronavirus, albeit not at the same scale as in Italy.

French finance minister Bruno Le Maire has said companies working for the state will not be penalised if their operations are delayed because of the virus, and that he is ready to take decisions “at the European level, when the time comes, to support economic activity and protect our businesses”.

Earlier this week, the IMF warned that the coronavirus crisis would have an impact on the global economy – its current baseline scenario predicts a 0.1 percentage point decrease in 2020’s GDP.

But fund managing director Kristalina Georgieva said “many scenarios” remain possible, and a more protracted outbreak could have serious consequences, especially in countries with poorly developed healthcare systems.

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