Factbox: The economic remedies for the coronavirus

(Reuters) - Policymakers and government leaders have taken a range of approaches to deal with the economic fallout from the coronavirus. Here is a list of how some of the world’s biggest economies and economic blocs have reacted.

German police officers check cars at the Austrian-German border crossing point after the German government decided to close its borders to foreigners as a preventive measure against the coronavirus (COVID-19) near the German village Kiefersfelden, Germany March 16, 2020. REUTERS/Michael Dalder


The U.S. Federal Reserve slashed rates back to near zero, restarted bond buying and launched other measures from its crisis-era toolkit, along with other central banks, to put the floor under a rapidly disintegrating global economy assailed by efforts to contain the coronavirus pandemic.

The Fed also encouraged banks to use the trillions of dollars in equity and liquid assets built up as capital buffers since the financial crisis to lend to business and households whose balance sheets and lives have been upended by the virus.

The central banks of the United States, the euro zone, Canada, Britain, Japan and Switzerland agreed on Sunday to offer three-month credit in U.S. dollars on a regular basis and at a rate cheaper than usual.

The U.S. Treasury Department will defer tax payments without interest or penalties for certain individuals and businesses negatively impacted, aiming to provide more than $200 billion of additional liquidity to the economy.

The Small Business Administration will also provide capital and liquidity to firms affected by the coronavirus.

Earlier, Trump signed a $8.3 billion emergency spending bill to combat the spread of the virus and develop vaccines for the highly contagious disease.


The ECB made it clear it would not tolerate “unwarranted” increases in borrowing costs and it was ready to buy more sovereign debt to allow governments to borrow on the cheap as they ramp up spending to combat the epidemic.

The ECB will also provide banks with loans at a rate as low as minus 0.75%, below the -0.5% deposit rate, and increase bond purchases by 120 billion euros this year with a focus on corporate debt. The ECB’s bank supervisory arm will let euro zone banks fall short of some key capital and cash requirements, to keep credit flowing to the economy.

But unlike its U.S. and British counterparts, it did not cut rates, instead pointed the finger at euro zone governments to do more.


China earmarked 110.5 billion yuan ($15.9 billion) to fight the epidemic. Beijing has ramped up funding support for virus-hit regions and the central bank has cut several key rates, including the benchmark lending rate, and has urged banks to give cheap loans and payment relief to exposed companies.

China will modify the environmental supervision of companies to help the resumption of production disrupted by the coronavirus epidemic, giving firms more time to rectify environmental problems.


Economy Minister Roberto Gualtieri said the government’s planned economic support package would total some 25 billion euros ($28 billion) to ensure that companies and workers were helped through the crisis.

He said the package would provide extra funding for the health system as well as a mix of measures to help companies and households including freezing tax and loan payments and boosting unemployment benefits to ensure no jobs were lost.

The measures, originally due over the weekend, are now expected after a cabinet meeting on Monday.

The government said payments on mortgages will be suspended across the whole of Italy and Italy’s banking lobby ABI said lenders would offer debt moratoriums to small firms and households grappling with the economic fallout from the virus.


The Bank of Japan said it would double its purchases of risky exchange trade funds (ETFs) to a pace of around 12 trillion yen ($112.6 billion) a year and it would create a new loan program to extend one-year, zero-rate loans to financial institutions to boost lending to firms hit by the outbreak.

To prevent credit markets from freezing up, it will set aside 2 trillion yen for additional purchases of commercial paper and corporate bonds and it would purchase Japanese real-estate trust funds (J-REIT) at a pace of 180 billion yen per year.

The government meanwhile announced a second package of measures worth about $4 billion in spending to cope with the fallout of the outbreak, focusing on support to small and mid-sized firms, as concerns mount about risks to the fragile economy.


European Union leaders have so far failed to agree radical measures to tackle the crisis. European Commission chief Ursula von der Leyen said on Thursday Brussels was working on responses including a “package to prop up the EU economy”.

Euro zone finance ministers, known as the Eurogroup, meet on Monday and signals before their meeting suggest that a large scale, coordinate fiscal boost is likely coming.


Germany’s center-left coalition agreed to increase public investments by 12.4 billion euros by 2024 and to make it easier for companies to claim subsidies to support workers on reduced working hours to counter the effects of the coronavirus epidemic.

Chancellor Angela Merkel’s conservatives are split over whether Germany should rush out a fiscal stimulus package to counter any impact of the coronavirus on Europe’s largest economy.


Britain launched a 30 billion-pound ($39 billion) economic stimulus plan just hours after the Bank of England slashed interest rates, a double-barreled package aimed at warding off the risk of a coronavirus recession.


The government is allowing companies to suspend payments of some social charges and taxes, and is activating state-subsidized short-time work schemes. It has ordered the Bpifrance state investment bank to guarantee loans needed to overcome short-term cashflow problems.

Paris has also allowed companies to declare force majeure due to the outbreak if they cannot honor a contract with the public sector, and is putting pressure on big companies to show similar leniency with subcontractors.


The Reserve Bank of India (RBI) plans to infuse fresh cash liquidity into the system through a second round of long-term repo operations (LTRO), government officials told Reuters, amid fears that the coronavirus outbreak will derail any revival of economic growth.

The RBI has said it stands ready to act to maintain market confidence and preserve financial stability.

The government is, meanwhile, pushing state-run banks to approve new loans amounting to 500 billion-600 billion rupees by the end of March, according to government sources.


Finance Minister Bill Morneau said on March 9 that the government was “looking at taking some initiatives this week,” as Canada reported its first coronavirus death, with a steep decline in oil prices expected to hit the world’s fourth-largest crude producer hard.

The Bank of Canada lowered its benchmark overnight rate to 1.25% from 1.75% in response to the epidemic, prompting money markets to price in a better-than-even chance of another reduction next month. The last time it cut by 50 basis points was in 2009 during the financial crisis.


The government announced a stimulus package of 11.7 trillion won ($9.8 billion) to cushion the impact of the largest outbreak of coronavirus outside China. An additional 10.3 trillion won in treasury bonds will be issued this year to fund the extra budget.

Seoul has also tightened rules on short-selling for three months. Starting March 11, stocks with a sudden and abnormal increase in short-selling transactions will be suspended from further short-selling for 10 days.

Reporting by Reuters Staff; editing by Angus MacSwan