Covid-19 has spread around the world, hitting industries such as catering, passenger transport and manufacturing hard, and is seen by many countries as the most serious challenge since the second world war. In an effort to shore up confidence in economic stability, many countries have stepped up stimulus packages to deal with the ill effects of the outbreak.


Germany: the biggest programme since the war


As the most populous member of the European Union, the situation of the outbreak is not optimistic. With the escalation of prevention and control measures, German aviation, tourism, automotive, catering and other industries have been hit hard. Some analysts think the German economy is likely to contract by 5% this year. The German economy minister said the outbreak would not cause less damage to the German economy than the 2008 international financial crisis.


On March 23, the German government held a cabinet meeting and approved an economic stimulus package totaling 1.2 trillion euros to cope with the outbreak of COVID 19. It was Germany's biggest stimulus since the second world war. In addition, the German government has also introduced a series of policies to help enterprises, which are mainly focused on fighting the epidemic, stabilizing enterprises and protecting employment.


The German government is determined to break through the long-standing strictures on fiscal policy by adding €156 billion to its budget this fiscal year. The decision breaks the basic principle of pursuing fiscal balance, but it shows Germany's determination to fight the epidemic and protect its economy. According to the finance ministry's draft, €60bn of the €156bn supplementary budget would be used to fight the outbreak directly, with another €50bn going to small and micro businesses and the self-employed. Employees of small and medium-sized enterprises will receive cash subsidies ranging from 9,000 euros to 15,000 euros per month.


In addition to the extra budget, the government plans to create a €600bn "economic stabilisation fund" to help German companies, along the lines of the special fund for financial market stabilisation set up in 2008 in response to the international financial crisis.


Finance minister gerhard scholz said the government would implement the stimulus as quickly as possible in an effort to recoup economic losses. The government has also ruled that between April and June this year, companies or individuals can defer payments on rent, and the landlord cannot terminate the contract for any reason during that period.


France: into the "war economy" mode


Recently, the French government introduced a series of administrative restrictions and control measures aimed at quickly controlling the spread of the epidemic. However, the negative effects of the epidemic on the economic impact gradually became apparent, and France officially launched the outbreak of the second world war "economic war" general mobilization.


France's employment sector is expected to lose more than half a million temporary jobs by the end of march, according to preliminary estimates from the French economy. Electricity consumption in France has fallen by about 15 per cent since the restrictions were imposed, according to the head of France's transmission company. In addition, statistics from the French food industry association show that the unemployment rate in the industry rose rapidly from less than 5% to 8% after the government implemented the control measures.


Faced with this situation, the French government is fully aware of the need to ensure the sustainable operation of the country's economy, and launched a general mobilization of the epidemic "economic war". French President Emmanuel macron has held a meeting with major companies, professional associations and key ministers to discuss the economic impact of the outbreak. "Our job is to prevent risks," macron said. "government controls do not mean a total cut-off of economic activity. "We need to make sure that the economy is functioning and that there is continuity, and that there is an organized government support for the economy."


The French government actively seeks a balance between fighting the epidemic and economic development. First, the French ministry of finance announced that it would give a tax-free bonus of 1,000 euros to those who kept working during the outbreak, which is expected to last until the end of June. Second, France's three major employers' associations and five major trade unions jointly called on all government agencies and enterprises to take all necessary measures to ensure the health and safety of employees who continue to work. Third, the French government is drawing up a list of strategic industries and enterprises to ensure the normal operation of the economy and epidemic prevention. At the same time, the French government will actively strengthen coordination with the textile industry to ensure adequate supply of medical protective equipment.


Australia: the stimulus package is coming thick and fast


In response to the economic impact of COVID 19, Australian prime minister Stephen Morrison announced a second stimulus package worth a $66.1 billion on March 22. From March 12 to launch a $17.6 billion in the first round of economic stimulus plan, emergency interest rate cut and launched a $90 billion the federal reserve bank of Australia's special financing arrangement, the government provided a $15 billion financing support, and launched the second round of economic rescue package to the plan, in less than two weeks, the Australian government departments has provided the support of a $189 billion, equivalent to 9.7% of GDP in Australia, the unprecedented scale of strength.


In terms of increasing support for workers and families, one is to provide follow-up assistance to job seekers affected by COVID 19. The government has temporarily expanded eligibility for income support to a $550 every two weeks on top of the existing job-seeker subsidy. Second, we will increase income support for families. In addition to the a $750 previously announced, an additional a $750 will be provided to residents in categories such as social security. The third is early release of pension. Fourth, temporarily reduce the minimum retirement withdrawal rate. Fifth, to reduce the social security presumptive rate of return. The change will benefit about 900,000 people, including pensioners.


On the corporate side, the government will provide subsidies ranging from a $20,000 to a $100,000 to small and medium-sized enterprises with annual turnover of less than a $50m. The measure will benefit some 690,000 businesses and some 7.8 million people.


In addition, the Australian government will establish the covid-19 sme guarantee scheme to support smes in obtaining working capital. It also provides temporary relief for enterprises in financial distress and temporarily raises the threshold for creditors to issue legal requirements on companies. Support of a $715 million has also been provided to qantas airlines and airports.


South Korea: 100 trillion won stabilizes economy


On March 24, South Korea held its second emergency economic meeting and decided to increase the allocation of funds to support the domestic economy to 100 trillion won (568.5 billion yuan) to provide liquidity to enterprises and stabilize financial markets.


Specifically, on the one hand, the government provided a total of 51.6 trillion won of operation and stability funds, mainly used to provide liquidity funds to south Korean large enterprises, medium-sized enterprises, small and medium-sized enterprises and self-employed people, to ensure normal business activities in the country. On the other hand, it provides a total of 48.5 trillion won of special funds to stabilize the financial market, of which 20 trillion won is used as the bond market stabilization fund, 10.7 trillion won as the securities market stabilization fund, and 10.8 trillion won is used to support Korean enterprises to issue corporate bonds.


On March 19, South Korea held its first emergency economic meeting and decided to allocate 50 trillion won to deal with economic risks. On the basis of the first meeting, the second emergency economic conference doubled the appropriation amount and expanded the scope of support.


Pakistan: support funds to ensure people's livelihood


On March 24, prime minister imran khan announced that the government would provide 1.2 trillion rupees ($7.56 billion) in support funds to help the economy and the general public cope with the impact of COVID 19, about a quarter of which will come from outside the budget for this fiscal year.


Support fund will be mainly used to protect the people's livelihood, hurried production, including the nationwide unified cut gasoline, diesel, kerosene price 15 rupees per liter, increase funding for public goods company to ensure that food price stability, the advance in the domestic procurement of 8 million tons of wheat increase farmers' cash income, the odd jobs in the next four months living allowance of 3000 rupees a month, providing concessional loans to small and medium-sized enterprises and relax its reimbursement policy, as well as to the exporters and industrial producers to provide liquidity cushion, etc. The bank also broke with its practice of cutting interest rates by no more than 0.75 per cent in a single cut, cutting them from 12.5 per cent to 11 per cent.


In addition, in order to ease the living pressure of the poor groups, the government also decided to exempt the import of basic food such as beans and oil from tariffs to reduce their prices, and allow some families to pay electricity and gas bills by installment. Sanja nishtar, a special adviser to Pakistan's prime minister on poverty alleviation, says 10m poor families across the country will receive cash handouts.


Pakistan's central bank has introduced a series of measures to ease the burden on export traders who are facing a sharp drop in overseas orders and an increase in the difficulty of fulfilling them.

timg.jpg