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What are the strategies of major economies to avoid bankruptcy in this crisis?
Hotels, airlines, and restaurants are among the most affected sectors, as are informal workers who have been limited in their ability to go out due to the crisis.
Restrictions have been implemented to prevent a much larger and more widespread economic impact; undoubtedly, many workers have lost their jobs—an estimated 24 million jobs globally—and the stock market continues its decline.
"I think the most crucial thing is that governments don't let solvent firms close down and lay off workers," Vicky Redwood, senior analyst at the British consultancy Capital Economics, tells BBC Mundo.
In the US, the Federal Reserve (equivalent to the US central bank) in addition to lowering interest rates to almost 0 and injecting $700 billion worth of liquidity into the market by buying Treasury bonds and mortgage securities, announced that it will resume its corporate debt purchase program, first implemented during the Great Recession of 2008.
President Donald Trump invoked a 1950 law on Wednesday that allows for government intervention in businesses . The aim is to mobilize private production to combat the coronavirus and could, for example, compel industry to produce essential medical supplies.
The UK announced it will guarantee $400 billion in government-backed loans to businesses affected by the pandemic. The measure represents around 15% of the country's GDP. It will also suspend mortgage payments for three months for those experiencing financial hardship and inject billions in direct aid and grants into small businesses, in addition to providing tax relief for a year.
Spain announced the mobilization of almost 20% of its GDP to combat the economic effects of the virus, with both public and private contributions. The government will open a line of credit guarantees for the hardest-hit companies.
In France, the emergency economic plan includes the immediate delivery of resources to workers and companies, the implementation of tax guarantees for loans, and specific measures to protect threatened companies, including nationalization if necessary.
The Italian government also announced the suspension of mortgage payments, financial aid to affected companies, money for affected self-employed workers , subsidies for the unemployed, temporary suspension of tax obligations for companies and citizens, a two-month ban on layoffs, an extension of parental leave, and a bonus for working parents to pay for childcare.
Germany surprised many by distancing itself from the dogma of budgetary discipline, announcing exceptional measures. This plan includes granting "unlimited" credit to businesses , with guarantees from public banks to prevent bankruptcies. Businesses also have access to public funding to reduce their employees' working hours due to declining production.
In Argentina, the government announced this week increases in subsidies for the poor , retirees, the unemployed, and pregnant women in vulnerable situations, and allocated an investment of US$1.5 billion for public works, housing, and tourism , in an attempt to address the economic consequences of the pandemic.
In Brazil, the minister announced this week a stimulus plan that includes injecting approximately US$29 billion into the economy. Nearly half of the money will be allocated to the country's poorest population through the early disbursement of various social assistance programs.
In Ecuador, proposals include eliminating public institutions and implementing a temporary salary reduction for public employees. The creation of a so-called National Humanitarian Emergency Fund is also being considered to guarantee food and healthcare and prevent a wave of bankruptcies among local businesses.
