Finance chiefs vie to inoculate world economy from virus

• Markets have crashed as world growth faces its biggest crisis since 2008, and have so far resisted the efforts to restore calm as the outbreak engulfs the West.
• US media reported Tuesday that the White House is seeking an $850 billion stimulus package, 10 times the level of a spending bill authorised by Congress a fortnight ago.
• The International Monetary Fund is making $50 billion in aid available for poorer countries, but has also appealed for a "global response".

LONDON: Governments and central banks are injecting eye-popping sums and emergency policy remedies into the global economy as the coronavirus pandemic upends all normal life.

Markets have crashed as world growth faces its biggest crisis since 2008, and have so far resisted the efforts to restore calm as the outbreak engulfs the West.

AFP surveys responses by major economies as the coronavirus has spread from China to infect the rest of the world, enforcing national lockdowns and crippling businesses:

NORTH AMERICA

US media reported Tuesday that the White House is seeking an $850 billion stimulus package, 10 times the level of a spending bill authorised by Congress a fortnight ago.

But President Donald Trump's election-year demands for specific steps such as a cut to income taxes face political opposition.

The Federal Reserve has taken interest rates down to virtually zero, and massively increased cash injections into financial markets including an additional $1.5 trillion last week and $1 trillion so far this week.

The US central bank also unveiled a new credit facility to help households and business stay afloat

US Treasury Secretary Steven Mnuchin said Tuesday that the White House will present its massive stimulus plan to Congress for rapid approval, and favours sending direct payments to all Americans right away, Treasury Secretary Steven Mnuchin said Tuesday.

In Canada, authorities are rolling out a Can$10 billion (US$7.5 billion) credit package to help struggling businesses and have also cut interest rates.

The International Monetary Fund is making $50 billion in aid available for poorer countries, but has also appealed for a "global response".

However, unlike in 2008, businesses are waiting in vain for a joint spending plan by the most powerful economies.

G7 leaders including Trump on Monday vowed to coordinate and "do whatever it takes, using all policy tools" to safeguard growth, but offered no specific action plans.

Dusting off their playbook from 2008, the Fed, European Central Bank, Bank of Japan and others on Sunday announced measures to try to keep dollars pumping through the global economy.

EUROPE

After China, Europe is now the epicentre of the COVID-19 coronavirus and governments have scrambled to open the spending taps while at the same time closing their borders.

The European Central Bank has announced extra steps to encourage bank lending to beleaguered companies, but surprised the markets by keeping its rates on hold.

In hardest-hit Italy, the government Monday promised to deliver a "very strong injection of liquidity" into the financial system to generate 340 billion euros ($380 billion) in cash flows.

President Emmanuel Macron of France, which is now on total lockdown, said Monday the government would ensure that all bank loans to companies are backed by a state guarantee totalling 300 billion euros.

The French government on Tuesday announced a separate aid package worth 45 billion euros to help businesses and employees cope.

Germany on Monday unveiled 550 billion euros in government-backed loans "for starters", and suspended legal obligations for firms facing acute liquidity problems to file for bankruptcy.

For the European Union as a whole, finance ministers pledged Monday to fight the coronavirus "war" but declined for now to tap up the European Stability Mechanism, the eurozone's 410 billion euro war chest.

Britain, now outside the EU, is readying new support after last week outlining fiscal stimulus worth £30 billion ($39 billion).

Spain said Tuesday it would guarantee up to 100 billion euros in corporate loans.

ASIA-PACIFIC

China, ground zero of the virus outbreak with more than 3,000 deaths, has cut interest rates and vowed a range of measures including tax cuts and more fiscal transfers from Beijing to virus-hit regions.

New Zealand Tuesday raided its "rainy day" fund to release NZ$12.1 billion (US$7.3 billion) in stimulus spending.

Last week, Australia unveiled a US$11 billion spending plan -- equivalent to just under one percent of GDP -- to help avert its first recession in 29 years.

Japan, which faces a financial hit from the possible postponement of the Tokyo Olympic Games this summer, is offering at least $15 billion in loan programmes for firms.

The Bank of Japan, bringing forward its latest policy meeting to Monday, said it would double its annual capacity to buy exchange-traded funds and property investment funds.

Hong Kong's government is giving a handout of HK$10,000 (US$1,280) to every permanent resident, battling to overcome a recession brought on by months of popular protests and now exacerbated by the coronavirus outbreak.