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Coronavirus pandemic: Germany, US, UK & EU ready $742 billion war chest to help stricken economies

In India, no such relief package has been announced as yet. Government officials say the coronavirus outbreak could derail the revival of economic growth

twitter-logo Vivek Dubey   New Delhi     Last Updated: March 15, 2020  | 16:23 IST
Coronavirus pandemic: Germany, US, UK & EU ready $742 billion war chest to help stricken economies
The total number of COVID-19 cases has touched 145,857 globally, of which 5,436 people have already died

Some of the world's largest economies have drawn up massive funds adding up to $743 billion to shore up their stricken economies, companies and healthcare systems from the coronavirus outbreak. Germany, United States (US), United Kingdom (UK), Italy and Switzerland have announced corona investment funds worth over $742.59 billion to reduce the havoc wreaked on all major sectors by the deadly COVID-19 outbreak.

Germany has announced funds worth $613 billion; the United States $50 billion; European Union and Italy $25 billion each; the United Kingdom $12 billion; and Switzerland $10.5 billion to help businesses and common people fight the impacts of the virus outbreak. The total number of COVID-19 cases has touched 145,857 globally, of which 5,436 people have already died.

In Germany, officials announced that state-owned bank KfW can lend up to 550 billion euro ($613 billion) to corporates, ensuring they shield their workers from its impact and survive the pandemic. German Finance Minister Olaf Scholz, in response to this aid, said, "This is the bazooka." "We're using it to do what is necessary. We'll check later to see if we need additional smaller weapons," he added, reported Financial Times.

The UK has allocated 12 billion euro ($13.37 billion) for coronavirus-related spending. Chancellor Rishi Sunak, in his first Budget on Thursday, announced a coronavirus spending of around 12 billion euro, plus 600 billion euros for infrastructure schemes.

The response to coronavirus includes 5 billion euro for the National Health Service (NHS), other benefits and tax changes to support self-employed and small businesses in the country.

The European Union has also pledged to invest 25 billion euro ($27.86 billion) to bear the coronavirus impact. EU, which fosters 28 member countries, said that it would bear the expenses of sick pay for small businesses and had announced a business rates holiday for people working in hospitality, leisure, and retail sectors. The union guarantees loans worth 8 billion euros to around 100,000 SMEs.

Italy, in response to the coronavirus outbreak, has already declared a 25 billion euro ($27.86 billion) package to push its deficit beyond the 3 per cent limit this year. Mortgage payments are suspended across the country. Italy's banking lobby Association of British Insurers (ABI) said that the lenders would offer debt moratoriums to small businesses and households, which are facing the impact of the financial fallout from the virus outbreak.

Switzerland also pledged 10 billion francs ($10.5 billion) of aid for its companies.

Earlier this week, President Donald Trump told the US Treasury Department to defer tax payments without penalties or interest for individuals and businesses, which are negatively impacted. Trump's move would provide over $200 billion of additional liquidity in the economy.

Trump also ordered the Small Business Administration to provide liquidity and capital to the business, which are affected by the coronavirus, by giving low-interest loans to small businesses.

The US Federal Reserve has also reduced interest rates by half a percentage in its first emergency rate move since the financial crisis in 2008. President Trump had declared a national emergency in the US due to the novel coronavirus outbreak.

Moreover, The White House and US Congress struck a deal on Friday for a relief package to assist people who are affected by the coronavirus outbreak. The White House will also vote on the relief plan, under which the US government will set aside $50 billion to deal with coronavirus outbreak.

The relief package includes several measures like -- two weeks of paid sick leave, up to three months of paid family and medical leave, enhanced unemployment benefits, free virus testing, additional food aid and federal funds for Medicaid.

In India, no such relief package has been announced as yet. Government officials say the coronavirus outbreak could derail the revival of economic growth. To offset the effect, the RBI may inject up to Rs 1 lakh crore ($13.6 billion) as early as April, Reuters reported. The RBI has said it's ready to act, maintain and preserve market confidence and financial stability. The Centre has reportedly also asked state-run banks to approve new loans amounting to Rs 50-60,000 crore by March-end.

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