More and more countries are therefore looking for sizeable support measures to cope with the negative consequences for the economy and to prevent companies from going under and citizens paying the bill.
Brussels is also taking action with an investment fund with 25 billion euros. The money is intended to support “the vulnerable parts of the European economy,” says Von der Leyen, European Commission President, such as small and medium-sized enterprises, labor market projects and health care. 7.5 billion is available immediately.
In order not to stand in the way of support measures in countries, the EU wants to relax European budget rules and state aid rules.
Italy
Italy invests € 10 billion in crisis measures for companies and households. “We have to change our way of life and give up something for the well-being of Italy,” said Italian Prime Minister Conte.
Italy wants to use this money to pay for part-time unemployment benefits and to grant deferment of tax payments to certain citizen groups. Households and small businesses receive exemption for paying their mortgages.
The aid package will increase the Italian budget deficit to 3 percent of GDP. The European Commission had previously imposed a maximum deficit ceiling of 2.2 percent, but the Italians assume that Brussels will accept the larger deficit, because they are crisis times.
Germany
The German government mainly focuses on measures concerning employment at companies. The car industry is being hit hard by the collapsed car sales in China. The rules for reducing working time are being relaxed and employers are being reimbursed for all social contributions.
Companies are expected to apply for a working time reduction for 124,000 employees in March.
Japan
Japan allocates € 8 billion for a package of support measures. This is primarily aimed at small and medium-sized businesses. Money is also invested in health care and subsidies are given to parents who have to take time off from the closed schools to take care of their children.
United States
President Trump announced on Monday that the US will also provide help and support. Until now, the US government did not consider support measures necessary and interest rate cuts were sufficient. But corona is now also plaguing the financial markets and that has turned the button in the White House.
Trump sees the stock market as an important indicator of the success of his political and economic policy. Rising stock prices mean political support, collapsing prices do not. The stock market is also important for many Americans for their retirement.
It is not yet clear which concrete incentives the US has in store, but it would include tax cuts for companies and paid sick leave for employees who are sick at home.
And the Netherlands?
The Netherlands does not yet have plans for extensive support measures. According to Prime Minister Rutte, the Netherlands can take a beating. The finances are in order and the national debt is very low, which provides a strong buffer.
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