Corona makes Europe's economy suffer - News-Credit-Mortgage-Coin


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Sunday, March 15, 2020

Corona makes Europe's economy suffer

The EU Commission announces that the COVID-19 pandemic could bring the EU economy to a spin. Ursula von der Leyen pleads for solidarity: "We are all Italians right now". From Brussels Marina Strauß.

She formulates the last message of her speech in English, then repeats it first in French and then in German: The situation will develop and the EU Commission is ready to do more - "whatever is necessary to boost the European economy support."
EU Commission President Ursula von der Leyen wants to make one thing particularly clear at the press conference in Brussels: The EU is preparing itself to help the member states in any form to prevent their economy from collapsing.
Together with two of her vice presidents, Margrethe Vestager, responsible for digital and competition, and Valdis Dombrovskis, responsible for business, von der Leyen presented this Friday what the EU Commission is doing to combat the economic consequences of the Corona crisis, which has now been classified as a pandemic want to do.

"A shock to our economy"
The virus is no longer just a threat to our health, but a "shock to our economy," says von der Leyen. Should the economy in the EU collapse, the EU Commission will consider suspending the European budget rules. For the time being, however, Dombrovskis wants to take advantage of all the leeway of the Stability and Growth Pact. According to its guidelines, a country may not borrow more than three percent of its gross domestic product. If an EU country violates this, there will be a deficit procedure and penalties. Exceptions are only possible if the circumstances are exceptional. For example in the event of natural disasters. Or like now in the COVID-19 pandemic.

In already ailing Italy, the economy is suffering badly because the government has now taken drastic measures to prevent the virus from spreading even faster. The country is practically cordoned off. Schools and universities are closed, restaurants as well, streets and squares are deserted. Belgium moves in the night from Friday to Saturday. For the time being there will be no "zona rossa", no restricted area like in Italy, but most of the public life will come to a standstill. Other European countries are also taking similar measures.
This increases the desire of some EU members to isolate themselves too. The topic was also on the agenda of the EU interior ministers in Brussels this Friday. Ylva Johansson, EU Commissioner for Home Affairs, said that it was possible to deny access to someone at the EU's external borders who showed symptoms during medical tests and could "pose a risk to the health of EU citizens". Each member country is allowed to carry out health checks at the borders between EU countries. According to Johansson, such tests are not considered "border controls". 
"Some controls could be justified," von der Leyen admits. However, the World Health Organization (WHO) did not see unilateral entry bans as the most effective means because they could have a negative impact on the economy and society within the EU. The governments of Slovakia and the Czech Republic closed their borders to practically all foreign travelers on Thursday.

The EU Commission also promises exceptions with regard to the normally prohibited state aid. The Commission is working on a framework similar to that adopted during the 2008 financial crisis "to stabilize the European economy," said Competition Commissioner Margrethe Vestager. Denmark has already approved Denmark's request to compensate organizers for large events that had to be canceled due to the corona virus, von der Leyen said, and the company is ready to react quickly to other countries.
37 billion for the fight against Corona
The EU Commission President also announced that the EU would provide 37 billion euros for the fight against the corona pandemic, twelve billion more than announced earlier this week. These are previously unused funds from the EU structural funds.
In addition, according to Finance Commissioner Valdis Dombrovskis, 100,000 small and medium-sized companies could expect guarantees for loans totaling up to eight billion euros in order to maintain their liquidity.
That could be urgently needed. A high Commission official also said on Friday in Brussels that growth in the EU could drop below zero, possibly considerably. A blatant turn: Actually, 1.4 percent growth was expected for 2020.
"We are all Italians right now"
Apart from economic aid, von der Leyen emphasizes the importance of European solidarity now. "We are all Italians right now," she says of the southern European country, which was particularly hard hit by the epidemic.

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