Paris (AFP)

Captain Haddock would not find his ports there. Billions of direct funding, billions of cost reductions, billions of loan guarantees ... It's hard to see clearly in the economic support plans announced worldwide in the face of coronavirus, and which may not be enough not.

. Bazooka

Business leaders, market analysts, economists are unanimous: everyone is looking for cash. "We are witnessing a panic movement in which markets, like businesses, seek liquidity at all costs, and sell anything that is salable," observes Agnès Benassy-Quéré, professor at the Paris School of Economics.

To stop the bleeding in this context of "exceptional situation", notes the chief economist of the insurer Allianz Ludovic Subran, "we entered an escalation between actors of public policies, governments and central banks". They make as many announcements as possible "rather than being a little groping, which was criticized by the ECB at the start".

The European Central Bank had indeed caused a movement of panic in the markets by announcing on March 12 measures deemed insufficient, before correcting the situation on Wednesday at the "bazooka": 750 billion euros in public and private debt repurchases here the end of the year.

. Billions, billions and billions

The objective of the ECB is to encourage European banks to maintain, or revive, loans to businesses first, as well as to households. In other words, to water all the liquidity to face this period when their revenues will be very low or even zero.

In general, the measures announced by the states are of three main types. "There are strict liquidity measures, such as tax deferrals or short-time working", "budgetary measures which will not be reimbursed such as short-time working, unemployment insurance, possible tax breaks", "and there are guarantees on SME loans", says Agnes Benassy-Quéré, who observes that "not all of them will be able to repay them". Governments will therefore have to compensate for these shortcomings.

The orders of magnitude? "Thousands of billions of cash, hundreds of billions of public debt facilitation loaned by states to businesses, and tens of billions more" of investments in health or infrastructure, adds Ludovic Subran.

. Who will pay the bill?

Many people on social networks remind Emmanuel Macron that he had declared, a few months before the health crisis, that there was "no magic money" to invest in the public hospital.

"There is a big difference, anyway, between making a plan of several tens of billions that stops over time, and setting up a recurrent expenditure item!", Balances Agnès Benassy-Quéré. In his eyes, the situation demands it all the more since it "resembles what happens during a war from a monetary and financial point of view".

If there is no destruction of the production sites or the productive force, there is in this kind of situation "no other way than to issue a lot of debt and to make sure that it will be bought by central banks. " "All the players will pay," adds Ludovic Subran, for whom "a clever mix of inflation and taxes" once the crisis has subsided should make it possible to compensate for these gargantuan expenses.

. Why are the markets going down?

Despite the string of spectacular announcements, the stock markets have not stopped their collapse. "The markets are + in mode + risk aversion because they have understood that we are in a recession which will most certainly be unique in its magnitude," said AFP Christopher Dembik, head of economic research at Saxo Bank.

"We must go beyond tax deferrals and state guarantees," he said, proposing, on the American model, to boost demand by giving money to households, "but in the good tempo, when the crisis will be contained and companies will reopen. " Another track: "a temporary but extremely drastic drop in corporate taxation".

. Is the stability of states threatened?

It will not be good for the budgetary equilibrium of the States but, after all, even Germany has said that it is ready to temporarily question its sacrosanct budgetary orthodoxy. Except perhaps for Italy, "there is absolutely no concern about sovereign debt" because it is the central banks that hold the debt of the large developed states, preventing too much runaway on these markets, still ensures Christopher Dembik.

On the other hand, Ludovic Subran is worried about seeing the coronavirus spread in countries where the kidneys are less solid, in particular in Africa. "All international measures are taken without any coordination, it is quite unprecedented" and worrying for the economies which cannot face the test alone.

Even the developed countries are not immune to painful tomorrows: the billions broken down by the public force in the private sector "have completely redefined the role of the state in the broad sense", observes the chief economist of Allianz. "It may be best in a period of sight navigation, but getting out of this situation is going to be of unnamed complexity." When, in fact, stop the devices now companies on IV drip?

© 2020 AFP