European countries are writing blank checks to save their economies

Rescue workers take care of a man who called the rescue team for a respiratory distress, Monday March 16, 2020 in Strasbourg, eastern France. For most people, the new coronavirus causes only mild or moderate symptoms. For some it can cause more severe illness. (AP Photo/Jean-Francois Badias)

London (CNN Business)European governments are writing blank checks to protect businesses and workers from the deep recession into which the global economy is sinking rapidly because of the coronavirus pandemic.France has so far taken the boldest approach, promising that no company will be allowed to fail as a consequence of the disease that has prompted businesses large and small to suspend operations. The government will guarantee hundreds of billions worth of loans, delay tax payments and suspend rent and utility bills for smaller firms. And the French state is ready to go further, nationalizing industries if necessary.”No French company, whatever its size, will be exposed to the risk of collapse,” President Emmanuel Macron said in televised national address on Monday.

The ironclad commitment to business, part of a response that Macron compared to being “at war,” is the latest in a series of dramatic plans outlined by European governments as they race to confront an outbreak that is killing thousands of people and slamming global giants such as Renault (RNLSY) and Lufthansa (DLAKY), as well as shops, bars and restaurants.Germany is mobilizing at least €500 billion ($550 billion) in loan guarantees and has pledged to provide unlimited liquidity to companies affected by the pandemic, part of a raft of measures that finance minister Olaf Scholz described last week as a “bazooka.” The country will also make it easier for companies to access loans made by the state development bank and delay tax payments for struggling businesses.”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,” the German government said. “If there are any signs of a serious disruption to the economy, the German government … will use all resources available to counter this forcefully.”

Source : CNN


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