Wednesday, 26 January, 2022

Coronavirus: the massive budget response of Europeans


In less than 20 days, the European states have pulled out the big budgetary artillery, with new spending deemed sufficient by economists: this ranges from 1.4% for Spain to 3.9% of GDP for Germany, in passing by 1.9% for France. A lack of coordination is always pointed out, and the Europeans have displayed their divisions this weekend on the “corona-bonds”.

Emmanuel Macron like his European counterparts with whom he held several remote meetings, all took out the checkbook to face the crisis.

It was March 12, an eternity, a time when only Italy had confined its population. While the coronavirus had just been recognized as a pandemic at the global level, Christine Lagarde then unveiled the first round of measures for the ECB that she chairs, and appealed to European states: they were to launch a “Ambitious and coordinated budgetary response” in response to the economic shock caused by the virus. Almost three weeks later, is the account there?

In recent days, the numbers have continued to swell as the health and economic toll worsened. The Europeans have brought out the big budgetary artillery, especially Germany: Berlin has thus planned 123 billion euros in additional spending (3.6% of its GDP), and even boasts of having a financial “bazooka” of 1,100. billion, including in particular the approximately 822 billion in State guarantees granted to corporate loans.

In less than 20 days, the European states have pulled out the big budgetary artillery, with new spending deemed sufficient by economists: this ranges from 1.4% for Spain to 3.9% of GDP for Germany, in passing by 1.9% for France. A lack of coordination is always pointed out, and the Europeans have displayed their divisions this weekend on the “corona-bonds”.

Emmanuel Macron like his European counterparts with whom he held several remote meetings, all took out the checkbook to face the crisis.

It was March 12, an eternity, a time when only Italy had confined its population. While the coronavirus had just been recognized as a pandemic at the global level, Christine Lagarde then unveiled the first round of measures for the ECB that she chairs, and appealed to European states: they were to launch a “Ambitious and coordinated budgetary response” in response to the economic shock caused by the virus. Almost three weeks later, is the account there?

In recent days, the numbers have continued to swell as the health and economic toll worsened. The Europeans have brought out the big budgetary artillery, especially Germany: Berlin has thus planned 123 billion euros in additional spending (3.6% of its GDP), and even boasts of having a financial “bazooka” of 1,100. billion, including in particular the approximately 822 billion in State guarantees granted to corporate loans.