Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Governments are pumping trillions into their economies. But some people could still be left out

As the coronavirus pandemic freezes populations in lockdown and pushes the world towards recession, a number of major governments have unveiled unprecedented stimulus packages.

Most of the emergency measures boast numbers rarely seen in peacetime.

In the United States, the price tag for the government's coronavirus response package is at $1 trillion-plus, a source estimated on Tuesday. In the UK, a £330 billion ($400 billion) plan was announced, and various badly hit countries in Europe have also unveiled 12-figure packages this week.

But even with such dramatic funds being pumped into the world's leading economies, experts warn that some groups could be left behind. And there are concerns the packages could further widen economic inequality.


United States

President Donald Trump on Wednesday signed into law a coronavirus relief package. Its speedy passage in the House and Senate represented a rare showing of partisan unity, although Senate Majority Leader Mitch McConnell and other Senate Republicans were critical of the legislation.

But "there are clearly people that are left out" from many of the bill's contents, Elise Gould, a senior economist at the Washington DC-based Economic Policy Institute, told CNN. "The measure for paid sick days actually have some gaping holes in it - one is that they don't apply to large employers."

Certain measures were scaled back when the bill was considered in the Republican-controlled Senate, including sick leave provisions.

The bill provides many workers with two weeks of paid sick leave if they are tested or treated for coronavirus, or have been diagnosed with it. Also eligible are those who have been told by a doctor or government official to stay home because of exposure or symptoms.

Under the revised bill, however, those payments are capped at $511 a day, roughly what someone making $133,000 earns annually. The original measure called for workers to receive their full pay but limited federal reimbursement to employers to that amount.

Workers with family members affected by coronavirus and those whose children's schools have closed will still receive up to two-thirds of their pay, though that benefit is limited to $200 a day.

The new legislation isn't the only economic package expected. The White House also appears to favor a plan to pay Americans checks directly, an idea that has some bipartisan support.

The total cost of the first wave of checks would be $250 billion, a source familiar with the matter told CNN.

"I don't think you can go too big here," Gould said of the plan, suggesting the first individual payments should be as high as $2,000.

"I care about the effect on the economy, but I also care that people are getting evicted from their apartments," Gould told CNN, urging that the approach - if adopted - is done on a monthly basis.

As with other major economies, service workers in the US are among the most economically vulnerable as bars and restaurants shutter.

The American Hotel & Lodging Association on Wednesday urged government assistance for hotels, saying that industry is facing a crisis "already more severe than anything we've seen before."


United Kingdom

Even before the pandemic paralyzed Europe, signs were emerging that Boris Johnson's government was moving away from the decade of austerity and tightened public spending that his Conservative Party has become known for.

But the crisis has accelerated that approach, with Johnson announcing a £330 billion ($386 billion) coronavirus package to help businesses stay afloat.

Johnson told Britons he was acting as though he was in charge of a "wartime government," announcing a raft of government-backed grants, loans and tax holidays for companies.

But the UK's positive employment figures are driven partly by casual workers, people on zero-hours contracts and freelancers, and it remains to be seen how many will lose work in closed pubs, clubs and restaurants.

Johnson didn't go as far as French President Emmanuel Macron in assisting families and renters, and some groups have warned people will slip through the net.

"As it stands, statutory sick pay will not cover the majority of rent payments, meaning renters who fall ill risk losing the roof over their heads," Kat Wright, of the Acorn union that represents renters, told CNN.

A three-month mortgage holiday "misses out huge swathes of the population," she added. The government has indicated further legislation will deal with renters.

The number of tenants has risen dramatically in recent years, especially for millennials. There were 4.5 million rented households in the UK in 2017, the latest year for which figures are available, compared with 2.8 million in 2007.

"Some landlords will be given a break on their mortgage payments but their tenants will still be forced to pay them rent should they become infected," Wright said. "This means millions of renters risk homelessness in the midst of one of the biggest public health crises of our time."

Homelessness rates have also spiraled amid the housing crisis, and campaigners say rough sleepers and those in temporary accommodation could be missed by the measures.

On Tuesday, £3.2 million ($3.7 million) was pledged to provide accommodation for rough sleepers who need to self-isolate. But whether the amount can cover Britain's homeless population, and for how long, remains unclear.


France

France unveiled arguably the most wide-reaching measures in Europe on Monday, waiving rent and utility bills for smaller firms and guaranteeing €300 billion ($324 billion) worth of loans.

"No French company, whatever its size, will be exposed to the risk of collapse," he said, also urging businesses not to lay off staff.

French Finance Minister Bruno Le Maire also signaled a willingness to intervene in individual situations, telling RTL Radio: "If we see, case by case, that some companies have difficulties to pay their charges, they won't have to pay them."

The announcements have led politicians in other countries to point to France's example and demand similar measures.

"Emmanuel Macron has suspended gas, electricity and rent payments for small businesses in France. Today the British government must announce further measures to protect the high street and workers who depend on it," UK Labour MP David Lammy said.

Analysts at Dutch bank ING said Monday that the "drastic" measures taken by Macron could limit the economic contraction in France to 1% this year.


Spain

Spain's Prime Minister Pedro Sanchez said his government will "spare no expense" in its economic response to the crisis, promising to leave no citizen behind.

On Tuesday, he unveiled a €200 billion ($216 billion) aid package, which he said amounted to about 20% of the country's GDP and marked "the biggest mobilization of economic resources in Spain's history."

Alongside a moratorium on mortgage payments for homeowners, some of the measures targeted those in insecure situations: Self-employed workers were given easier access to unemployment benefits, and €600 billion ($648 billion) was earmarked to provide aid to vulnerable groups.

But Spain's unemployment rate sits among the highest in Europe, leaving pockets of society financially vulnerable.

And evictions in Spain soared since the outbreak of the 2008 financial crisis, leaving uncertainty looming over many of the country's tenants.

It is "particularly important" to keep employment levels steady in Spain, said Angel Talavera, the head of European Economics at Oxford Economics.

"The labor market is much more reactive to downturns in economic activity than anywhere else in Europe, which means that a sharp contraction in GDP - even if it's temporary - could result in a big loss of employment," Talavera told CNN.

Spain went into lockdown on Monday, shutting bars, restaurants and shops. Some 47 million Spanish residents have been banned from leaving home - with the exception of those going to work, buying food, going to a hospital, or supporting an elderly person or child in their care.

"Small businesses, which typically have very small cash buffers, and those in sectors that will be particularly hit by the containment measures - hotels, restaurants, tourism - are particularly vulnerable," Talavera said.

AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
U.S. and Hungarian Officials Talk About Economic Collaboration and Sanctions Strategy
Technology Giants Activate Lobbying Campaigns Against Strict EU Regulations
Pope Francis Admitted to Hospital in Rome Amid Increasing Speculation on Succession
Zelensky Calls on World Leaders to Back Peace as Tensions Rise with Trump
UK Leader Keir Starmer Calls for US Security Guarantee in Ukraine Peace Deal
NATO Chief Urges Higher Defense Expenditure in Europe
The negotiation teams of Trump and Putin meet directly, establishing the groundwork for a significant advancement.
Rubio Touches Down in Riyadh Before Key U.S.-Russia Discussions
Students in Serbian universities Unite to Hold Coordinated Protests for Accountability.
US State Department Removes Taiwan Independence Statement from Website
Abolishing opposition won't protect Germany from Nazism—this is precisely what led Germany to become Nazi!
Transatlantic Gold Rush: Traders Shift Bullion in Response to Tariff Anxieties and Market Instability
Bill Ackman Backs Uber as the Company Shifts Towards Profitability
AI Titans Challenge Nvidia's Supremacy in Light of New Chip Innovations
US and Russian Officials to Meet in Saudi Arabia Over Ending Ukraine Conflict. Ukraine and European leaders – who profit from this war – excluded from the negotiations.
Macron Calls for Urgent Summit as Ukraine Conflict Business Model is Threatened
Trump’s Defense Secretary: Ukraine Won’t Join NATO or Regain Lost Territories
Zelensky Urges Europe to Bolster Its Military in Light of Uncertain US Backing
Chinese Zoo Confesses to Dyeing Donkeys to Look Like Zebras
Elon Musk is Sherlock Holmes - Movie Trailer Parody featuring Donald Trump's Detective
Trump's Greenland Suggestion Sparks Sovereignty Discussions Amid Historical Grievances
OpenAI Board Dismisses Elon Musk's Offer to Acquire the Company.
USAID Uncovered: American Taxpayer Funds Leveraged to Erode Democracy in Europe Until Trump Put a Stop to It.
JD Vance and Scholz Did Not Come Together at the Munich Security Conference.
EU Official Participates in Discussions in Washington Amid Trade Strains
Qatar Contemplates Reducing French Investments Due to PSG Chief Investigation
Germany's Green Agenda Encounters Ambiguity Before Elections
Trump Did Not Notify Germany's Scholz About His Ukraine Peace Proposal.
Munich Car Attack Escalates Migration Discourse Before German Elections
NATO Allies Split on Trump's Proposal for 5% Defense Spending Increase
European Parliament Advocates for Encrypted Messaging to Ensure Secure Communications
Trump's Defense Spending Goal Creates Division Among NATO Partners
French Prime Minister Bayrou Navigates a Challenging Path Amid Budget Preservation and Immigration Discourse
Steering Through the Updated Hierarchy at the European Commission
Parliamentarian Calls for Preservation of AI Liability Directive
Mark Rutte Calls on NATO Allies to Increase Defence Expenditures
Dresden Marks the 80th Anniversary of the World War II Bombing.
Global Community Pledges to Aid Syria's Political Transition
EU Allocates €200 Billion for AI Investments, Introduces €20 Billion Fund for Gigafactories
EU Recognizes Its Inability to Close the USAID Funding Shortfall Due to Stalled US Aid
Commission President von der Leyen Missing from Notre Dame Reopening Due to Last-Minute Cancellation
EU Officializes Disinformation Code for Online Platforms, Omitting X
EU Fails to Fully Implement Key Cybersecurity Directives
EU Under Fire for Simplification Discussions Regarding Corporate Sustainability Reporting
Shein Encountering Further Information Request from the EU During Ongoing Investigation
European Commission Initiates Investigation into Shein as It Aims at Chinese E-Commerce Regulations
German Officials Respond to U.S. Proposal for Peace Talks with Russia
Senate Approves Robert F. Kennedy Jr. as Secretary of Health and Human Services.
Trump and Putin Engage in Discussions on Ukraine Peace Negotiations Amid Worldwide Responses
Honda and Nissan End Merger Talks
×