Faced with the risk of economic breakdown following the epidemic of Coronavirus, Italy has just taken budgetary measures with 20 billion euros to support the economy. France argues for a European fiscal stimulus, but other countries like Germany are dragging their feet. This could quickly change since the main German economic institute considers the recession inevitable.
All of Europe is looking for a solution in the face of the devastating consequences of the coronavirus on the economy, we must avoid a breakdown.
All European countries have understood one thing, it is urgent to intervene to avoid a cascade of bankruptcies due to cash flow problems. In France, Germany, Italy and elsewhere, measures have been taken to defer social and tax charges and liquidity support to SMEs. There is also talk of easing the rules that weigh on banks to grant loans. Some even go so far as to demand the establishment of lines of credit which would be guaranteed by the State, except that it would be necessary to go very quickly to do so because many companies are already on the brink of rupture. Another idea put forward by the CPME, which represents SMEs, would consist in recognizing a state of "health catastrophe", like the state of "natural disaster", which automatically triggers extension clauses of deadlines.
Will this be enough to avoid the economic breakdown?
No, and that's where we find the usual fault lines in Europe. Italy has just taken budgetary measures with 20 billion euros to support the economy. France advocates for a European fiscal stimulus. Pointing out that this is exactly what Japan, China or the United States are doing. But other countries like Germany are dragging their feet. This could quickly change since the main German economic institute considers the recession inevitable. The pressure from German employers in favor of stimulus measures is strong. Europe must act quickly to avoid the big plunge.