Efforts to provide some support to the European economy form the hit of the coronavirus pandemic is being taken by European authorities.
A package of measures that includes a €37bn euro investment initiative will be put in by the The European Union (EU). On the other hand, Germany could part nationalize firms to address the economic fall out of the virus outbreak, said the country’s finance minister Olaf Scholz. And some of the taxes imposed on airlines have been suspended in Norway even as the global aviation body IATA warned that some airlines could even close down because of this hit.
With the economic impact of the spread of the coronavirus becomes more pronounced, global financial markets have also become increasingly volatile. There was a rise in global markets on Friday after suffering record fall the day before.
A number of actions by European authorities were announced on Friday with te rise in the concerns over the economic effects of the pandemic.
Allowing the member states to be more flexible on budget deficits and state aid will be among the response package of the EU, said European Commission President Ursula von der Leyen. She added that guaranteed loans of €8bn to 100,000 companies of the bloc to support the corporate sector will also be given out by the EU.
“I am convinced that the European Union can withstand this shock,” she said. “But each member state needs to live up to its full responsibility and the European Union as a whole needs to be determined, coordinated and united.”
The Commission wanted to ensure “necessary supplies to our health systems” and to try and ensure income and jobs of people, von de Leyen added.
On the other hand, Germany plans to provide some tax relief and deferrals to companies that would result in loss of billions for the state treasury, said German finance minister Olaf Scholz. The government could also take up stakes in companies ailing because of the virus outbreak.
“The German government… all agreed together that we will use all means to ensure we can tackle this crisis,” Scholz said. “We will every available tool at our disposal to get through these difficult times with all our economic possibilities and to make sure we come out of this situation in good shape.”
The airline sector has been one of the worst hit industries because of the coronavirus pandemic as travel curbs by governments to prevent the spread of the virus resulted in a sharp drop in demand. Airlines have been forced to cancel thousands of flights to virus affected countries and regions.
The virus outbreak has forced Norwegian Air to cancel 4,000 flights and suspension of half of its staff, the company announced on Thursday.
After announcing some tax cuts applicable on airlines, Norway’s government said that it is talking with the aviation industry of the country to work out what more measures could be taken to cushion the hit, said the country’s finance minister Jan Tore Sanner said.
“We are well informed of the wishes of the airline industries… I don’t want to speculate on what measures could be implemented,” said finance minister Jan Sanner said.
(Adapted from BBC.com)