European governments determined to save their economy, thus, writing blank checks


Coronavirus has hit the globe, and as the major European countries have imposed quarantine, economies are going into a deep recession. France is taking bold steps to sustain the economy and has declared that no company, whether small or big, will fail because of the closedown. They will extend business loans, delay taxes, suspend rent and utility bills from the small firms. If required, they will also nationalise the industries. 

President Emmanuel Macron addressed the nation on television on 16th March 2020, "No French company, whatever its size, will be exposed to the risk of collapse," 

Germany has also decided to ensure the economy sails through the turbulent times. Olaf Scholz, the Finance Minister, declared unlimited liquidity to the companies and loan guarantees up to $550 billion. 

The German government said, "Due to the high degree of uncertainty in the current situation, the government has very deliberately decided to not set any limits on the volume of these measures". "If there are any signs of a serious disruption to the economy, the German government ... will use all resources available to counter this forcefully." 

The Prime Minister of Spain has unveiled a rescue package worth $200 billion and ensured that the government would provide capital to avoid the bankruptcy of the companies.

The United Kingdom was globally criticised for not supporting the fight. Still, Sunak Shah, the Finance Minister of the UK, declared that the government would back $400 billion loans to the companies and mortgage providers have agreed to delay the instalments by three months. 

"We have never faced an economic fight like this one, but we are well prepared," said Sunak. "We will do whatever it takes." 

The move is considered positive and essential by the economists as it will balance out the economy. The business houses will sustain, and labourers who will be laid off because of closing down of manufacturing units in Europe will have financial support from the government. Due to restrictions in travel and public life, the unemployment rate may increase. Still, with the collaborative support from all the governments, the chances of bounce back by the economies are higher. 

The United States is yet to announce its rescue package, but the Trump administration has proposed a business loan of $850 billions provided the Congress approves of the proposition. US airlines are quickly running out of cash, but direct financial assistance may prove to be controversial because of the global automobile industry crisis. 

"We have a lot more work to do," US Treasury Secretary Steven Mnuchin said Tuesday, "and we have to do it quickly."