March 29, 2020

How Other Countries are Dealing with the Economic Fall-Out of Coronovirus

United Kingdom: UK unveiled a range of financial measures including £330bn in loans, £20bn in other aid, a business rates holiday, and grants for retailers and pubs. Statutory sick pay of £94.25 per week will be available from the first day of illness rather than the fourth.

British government would pay grants covering upto 80 per cent of the salary of workers, if companies kept them on their payroll, instead of laying them off. The extraordinary payment will be worth upto £2,500 a month, just above the median income. This will be for three months starting from March 1. Millions of workers will get pay from the government in this way.

CHINA: Chinese government has announced a comprehensive economic revival package. The focus is to increase infrastructure investment, backed by $394 billion worth local government special bonds. The lead role is for fiscal policy. Reuters reports that China aims to speed up the construction of planned key infrastructure projects as well as launch some new projects for public health, emergency materials supply, 5G networks and data centers in 2020. As a result, China's national budget deficit ratio could rise to 3.5 per cent in 2020, up from 2.8 per cent last year. There are also important monetary policy measures announced: credit/tax relief to firms, especially small businesses and cuts in banks’ reserve requirement ratios and interest rates.

FRANCE: Bruno Le Maire, France’s finance minister, on Tuesday detailed €45bn in direct tax breaks and direct state payments for the country’s economy in addition to €300bn of loans. The government stood ready to nationalise large companies.

UNITED STATES: $1 trillion (could include direct payments to Americans under a certain income threshold, $200 billion in loans to airlines and distressed industry sectors and $300 billion in forgivable bridge loans for small businesses.) To be finalised by Congress.

NETHERLANDS: Dutch governmentt will cover 90 per cent of salaries lost because of reductions in work hours.

DENMARK: The government will shoulder 75 per cent of wages to prevent affected companies from carrying out layoffs. (up to a maximum of 23,000 kroner or roughly £2,840 a month) if firms promise not to fire employees.

NORWAY: Under pressure from the trade unions and Left parties, the government was compelled to announce that workers put on leave will get full pay for 20 days.  Employers will only cover the first two days, while the rest will be paid by the State.  After that period, a worker on leave will receive 80 per cent of their salary, upto € 26,000 a year and 62.4 per cent of everything they receive on top of that.

SPAIN: Prime Minister Pedro Sánchez announced €100bn of loans and guarantees for companies in need of cash, as part of what he described as the “biggest mobilisation of resources in the country’s democratic history”. It has nationalised all hospitals.

CANADA: will provide up to $27 billion in direct support to Canadian workers and businesses, plus $55 billion to meet liquidity needs of Canadian businesses and households through tax deferrals "to help stabilise the economy.” Justin Trudeau said, combined, the $82 billion in support represents more than 3 per cent of Canada’s GDP.

GERMANY: The German government is expanding “Kurzarbeitergeld” – a scheme which provides government subsidies to employees sent home during economic crises. Chancellor Angela Merkel termed it the biggest crisis faced by the country since World War.

ITALY: The Italian government will provide more than €500 to each self-employed person. The State will subsidise the wages of some staff who are temporarily laid off.

JAPAN: The Japanese government announced an economic package that provided grants and loans to small and medium-sized businesses. It is considering handing out 12,000 yen (£94) to each citizen.]

SPAIN: The Spanish government will subsidise workers who have been temporarily laid off by giving them access to the benefits system. A range of loans and grants is also being made available to businesses.

SWEDEN: The Swedish government will heavily subsidise workers’ salaries. Employees will collect 90 per cent of their wages and will work reduced hours.

AUSTRALIA: The Australian government will pay $750 (£373) to all lower-income citizens on March 31. Small and medium-sized enterprises can apply for up to $25,000 (£12,431) to cover employees’ wages.