List of government that have bailed out businesses due to coronavirus effects

As the global economy faces dire disruptions due to lockdowns, various governments have moved in to announce bailouts to cushion businesses from difficult economic times.

Some of the governments have been forced to get into the arrangements due to pressure from entities facing cash crunch due to the effects of coronavirus, which has hit all parts of the world

The International Monetary Fund (IMF), for example, which has 189 member countries, says it’s prepared to mobilize $1 trillion in lending. IMF also has $10 billion reserved as loans for low income countries at no interest.

According to Quartz, a global business news agency, The European Central Bank (central bank for the euro system) kept its main interest rate steady at -0.5 per cent last week.

Here are other governments, countries and regionally integrated financial institutions that have given their citizens’ businesses bailouts, according to Quartz.

The US

In the United States, President Donald Trump is reportedly seeking $850 billion of stimulus. Senate Democratic leader Chuck Schumer plans to announce a $750 billion aid package as the $8 billion of emergency funding already approved is negligible to be an economic stimulus.

The U.S Treasury is also deferring tax payments without interest or penalties for some individuals and businesses.

Small Business Administration grants are also under consideration, as is help for restaurants and retailers hit by the coronavirus slowdown.

The Federal Reserve slashed interest rates to near zero, and is buying $500 billion of treasuries and at least $200 billion of agency mortgage-backed securities to keep those markets functioning.

The central bank asked lenders to eat into their capital holdings to help their customers.

China

In China, where the Covid-19 outbreak originated, a less visible bailout could be very large—banks reportedly have approval from the government to roll over loans, relax guidelines on overdue debt, avoid reporting delinquencies, and for borrowers to skip making payments.

The People’s Bank of China cut bank reserve requirements at banks to free up $79 billion for lending to crisis-hit companies and says it will reduce interest rates for borrowers.

France

France officials are set to spend €45 billion to help small businesses and employees.

President Emmanuel Macron said there will be unlimited aid for businesses.

Germany

The government in Berlin is pledging a package of at least €550 billion ($608 billion) and offering unlimited credit to keep businesses afloat.

The United Kingdom

Officials in London pledged £30 billion of emergency spending on March 11.

That includes a £5 billion emergency response fund for the National Health Service, statutory sick pay for people who have been told to self-isolate, and sick-pay refunds for companies with fewer than 250 employees.

The British government also said on Tuesday that it’s assembling a bailout fund of £330 billion ($400 billion)—roughly 15 per cent of gross domestic product—to offer state-backed loans support UK businesses. Small operators in retail, hospitality, and leisure will be eligible for cash grants of up to £25,000.

Homeowners in financial difficulty because of the pandemic will enjoy a three month mortgage holiday.

Italy

The government approved €25 billion ($49 billion) of support for companies and workers, including extra money for the health system, increasing unemployment benefits, freezing tax and loan payments, and suspending mortgage payments.

The effort will also make use of €340 billion of financing, and more efforts are expected to follow.

Canada

The government is planning C$10 billion ($7.2 billion) in credit for businesses.

India

The government is reportedly pushing its banks to approve as much as 600 billion rupees ($8.1 billion) of loans by the end of March.

The Reserve Bank of India announced long-term repo operations (LTRO) to reduce interest rates and boost lending.

Japan

The government has announced a spending package of about $4 billion that is focused on small and mid-size companies. A government-affiliated lender will offer funds charging (effectively) no interest to small firms whose revenues have dropped because of the virus.

The Bank of Japan will buy more than $100 billion worth of exchange-traded funds, twice its earlier pledge, while setting aside money to keep corporate funding markets operating.

The European Union

Authorities are considering repurposing their bailout fund, originally designed to combat the euro zone’s sovereign debt crisis, to cushion the impact of a recession. The so-called European Stability Mechanism has more than €400 billion of unused capacity.

The European Commission is assessing a €37 billion Coronavirus Response Investment Initiative to be used for healthcare, supporting workers, and small- and medium-size businesses.

However, Kenya is yet to follow suit as the tourism industry is the only sector that has been given a sh500 million bailout. This is due to the many cancelations of bookings and travel plans with hotels reporting just

Pressure keeps mounting for taxes to be waived and even banks have been advised to relent on loan terms.

https://qz.com/1819776/here-are-the-coronavirus-bailouts-being-prepared-around-the-world/