Governments of the World Responds to Financial Distress Caused by Coronavirus

As the Prime Minister of India, Narendra Modi, was announcing one of the longest and strictest lockdowns in the world to the protect the citizens of the country, the opposition was busy raising their demand for financial compensation for the poor of the country. While the government has rolled out some relief measures such as extending the dates to file taxes and making up for the loss of income for the daily wage workers and other poor sections of the society, the Economic Response Task Force under Finance Minister Nirmala Sitharaman is yet to come up with a comprehensive relief plan.

Meanwhile, let us look at how governments all over the world are helping their citizens.  A lot of developed countries have announced large spending programs for their citizens and businesses to tide over this unprecedented crisis.

Italy

Coronavirus has created havoc in the life of Italians with the country suffering the highest number of causalities over the course of the last two months. The country is in the state of total lockdown which has impacted the lives of the common people. Prime Minister Giuseppe Conte’s government announced a stimulus package of 25 billion euros ($28.3 billion) labelled as “Italy Cure” to shield its citizens economically from the threat of the Chinese virus. As part of the “Italy Cure” rescue plan, €10 billion will be allocated to support employment and workers and another €3.5 billion to help the struggling and overwhelmed healthcare system.

USA

The Senate and the White House reach an agreement on a $2 trillion stimulus package to rescue the US economy from the effects of Coronavirus. The agreement aims to flood the economy with capital by sending $1,200 checks to many Americans, creating a $367 billion loan program for small businesses in the country and setting up a $500 billion fund for industries, cities and states. Other provisions include a massive boost to unemployment insurance, $150 billion for state and local stimulus funds and $130 billion for hospitals.

UK

Rishi Sunak, Finance Minister of UK, launched a gigantic stimulus package which included the government paying wages of workers throughout the country provided the employers don’t lay people off. The finance minister said that they will allocate 30 billion pounds of direct support to businesses which is equivalent to 1.5% of the country’s GDP. The UK Government will cover 80% of workers’ salaries up to £2,500 a month, defer VAT bills till the end of the year and increase welfare payments by £7billion in an extraordinary package to fight coronavirus crisis. Taken together, the emergency steps announced by the finance minister of UK are worth at least £330bn in state loan guarantees and £20bn in fresh tax reliefs and grants. Experts forecast that Mr Sunak’s intervention could save 800,000 jobs in Britain’s workforce for when the country eventually emerges through the health emergency.

Spain

Spain is the second most affected country by this Coronavirus pandemic in Europe. It announced the largest relief package in the history of the country at €200 billion ($220 billion) to fight coronavirus known as COVID-19. To reduce compounding economic failures, the government pledged a €200 billion stimulus on Tuesday, of which €117 billion will come from the public sector. The package includes a moratorium on mortgage payments for people who are adversely affected by the COVID-19 crisis. The government has halted evictions and guaranteed water, electricity and internet to vulnerable households without any conditions. €100 million will be used to guarantee liquidity for Spanish businesses and €30 million was allocated to researchers trying to develop a coronavirus vaccine.

Canada

Canadian Prime Minister Justin Trudeau said his government would provide C$27 billion ($18.6 billion) to families and businesses struggling because of the coronavirus outbreak. The government will also provide C$55 billion in additional aid to businesses and households through tax deferrals so that liquidity needs are met. Canada also announced that it would spend $192 million towards a vaccine for COVID-19. The total relief package of $82 billion represents more than 3% of Canada’s GDP.