Economic Therapy in Times of Pandemic

The coronavirus pandemic has paralyzed the world economy

Corina Cristea, 10.04.2020, 14:24

The
coronavirus pandemic has paralyzed the world economy, and threw the world in a
recession that will be much more serious than the global financial crisis of a
decade ago. This is the belief of the general manager of the IMF, Kristalina
Georgieva. She made an open appeal to advanced economies to widen their efforts
of helping the emerging and developing economies in order to overcome the
economic and health impact of the pandemic. Am much as 90 billion dollars in
investments have been removed from emerging markets, much more than during the
2008 financial crisis, Georgieva warned. Faced with a common enemy, government
and each financial institution are seeking solutions. If across the ocean
Washington has put together a historic plan to rescue the American economy,
hard hit by the pandemic, a plan of two trillion dollars, Europe is also taking
exceptional measures. President of the EC Ursula von der Leyen said that only a
strong response would allow Europe to face down this coronavirus, and that they
have to use every means at their disposal. She added that every Euro in the EU
budget would be redirected towards overcoming the crisis, and each regulation
would be relaxed in order to allow financing to circulate quickly and
effectively. The Union made important decisions that mobilize considerable
amounts of money, which each of the member states has to manage optimally.
After lengthy discussions, EU finance ministers agreed on an emergency package
for the member states most affected by the coronavirus – over 500 billion
dollars to help workers, businesses, and governments. As a member of the Union since 2007, Romania
is a part and a beneficiary of this concentrated European effort. Here is Euro
MP Siegfried Muresan, talking about it on Radio Romania:

The
EC has proposed important measures that will help us a lot in the fight against
the coronavirus. First of all, it proposed allocating right away three billion
Euros in supplementary funds out of the 2020 EU discretionary budget. That was
an EU reserve for this year, which have been accessed in the fight against the
coronavirus. Of this fund, 300 million Euros are allocated right away for the
acquisition, at the European level, in a centralized manner, of medical
equipment relevant to the fight against the virus and for testing. Secondly,
the EUis proposing the immediate
allocation of 2.7 billion Euros from European funds for the following: the building
and installation of temporary medical facilities, for instance, the hospital
built by the Romanian Army in Bucharest can be claimed out of European funds;
the building, equipping, and maintenance some quarantine centers, which is also
very important in Romania, for people coming into the country from red zones;
the bolstering of production of medical equipment, because we saw how in
Romania a factory that so far has been making something else now produces masks
relevant to the fight against coronavirus. All this reorientation of technology
can be paid for with EU funds. This is the first set ofimportant measures taken by the EU. The
second important set of measures is the increase in flexibility in using
European funds, which means that we are allowed transfer between the various
categories of European funds already allocated to Romania. And one other very
important thing, the EU says that a country that has not managed to absorb EU
funding on time would not lose it, because this is force majeure, and we cannot
lose unabsorbed funds.

The
EC has also proposed a 100 million Euro fund for loans to help countries to
come out of the economic country generated by the coronavirus. The point of
this solidarity instrument would be to help working people maintain their
income, as well as support enterprises, so that they can keep afloat. All these
measures are drawn based on the present EU budget, and are meant to maximize
the use of every available Euro, proving once again why the EU has to have a
long term and flexible budget. The second flexibility measure has to do with
the budget deficit, allowing ailing economic areas to go above the so far
permitted ceiling of 3%. The whole of Europe is now talking about solidarity.
Here once again is EuroMP Siegfried Muresan:

Solidarity
is necessary, without a doubt, in this situation, and it is essential to reach
it at the beginning of this process with concrete measures. If the EU proposes
concrete solution in coming to our help, European countries and peoples feel
that they are getting help, then they will be accepted. If countries see that
no solutions are coming from the European level, that there is no solidarity
between European countries, then they will be doing everything on their own, at
the national level, they will compete with one another in acquiring protective
equipment, which would be in no one’s interest, preventing solidarity in the
long run.

The
Euro MP added that the EU has proposed good measures, that he believes would
achieve solidarity, and that member countries are already helping each other,
because of how serious the situation was everywhere, and that everyone is
helping due to solutions that the EU provides for all people.