How has the world reacted to coronavirus?

22 Mar 2020

 

As coronavirus spreads, stricter measures are employed to control the damage it has and will cause. Spain has cancelled any events with over 1000 participants whilst Italy has suspended professional sports, cinemas, theatres and gyms until the 3rd of April. More recently, France hinted it would extend the 15 day lockdown and Italy will definitely extend past the previously set end date of the 25th of March. 

 

Europe has been restricting travel: Italy severely limiting travel between cities, France suspended flights from Italy until April 3rd and thousands of travellers are stranded in Spain after foreign airports refused to take flights from Barcelona and Madrid. On the 16th of March, Germany closed its borders with France, Austria and Switzerland whilst its borders with Poland, the Czech Republic and Denmark were already closed. The EU hopes to impose a travel ban in the EU+ area (including Iceland, Lichtenstein, Norway and Switzerland) and the United Kingdom if it decides to cooperate. 

 

This would prohibit non-EU+ citizens from entering the bloc however, there would be exceptions for long term residents, long-term visa holders or those with serious family reasons. The closure of borders within Europe threatens one of the key features of the EU, freedom of movement, therefore the Commission is attempting to close off the continent to convince state leaders to re-open their borders.   

 

Travel restrictions have also been imposed outside of Europe. There have been accounts of travellers with histories of Chinese visas in their passports being turned away from ASEAN (Association of Southeast Asian Nations) countries though no official policy on this matter has been released. Brunei has banned citizens and foreign residents from leaving the nation, Cambodia banned entry of foreigners from Italy, Germany, Spain, France and the US for 30 days and the Philippines are cancelling all domestic and international flights between the 19th of March and the 14th of April. 

 

Though on the 18th of March China reported no new cases it reported 34 new cases amongst people who recently returned home, in Singapore 33 out of 47 cases were imported. This rise in imported cases may result in tighter border restrictions however, many of these imported cases are citizens returning home and it’s doubtful countries would start turning them away. 

The early stages of financial support networks are coming to the surface as governments attempt to rescue slowing economies and vulnerable workers. The EU’s Internal Market Commissioner, Thierry Brenton, said a recession was expected with a 2-2.5% negative growth rate. 

 

The Royal Bank of Scotland said those who face financial difficulties due to the virus can delay mortgage or loan payments for up to 3 months whilst in Italy the economic ministry said it will suspend mortgage payments. 

 

These measures will be more necessary in certain countries than others, 13% of Italian households have mortgages on them compared to 28% in the UK requiring the British government to mobilise a significant support network. 

 

Business will need to be protected by governments in the hope of protecting the economy and the workers. The car industry has been hit hard by the virus: General Motors, Fiat Chrysler and Ford shut down all of their US factories temporarily whilst Lamborghini shut down its Italian plant until the 25th of March. 

 

The vulnerability of the car industry to the virus is a daunting prospect for Europe, Volkswagen, Daimler and BMW are Germany’s main exporters with vehicles forming 16.4% of their exports. For France the number is 9.5%, for the UK it’s 10.8% and for Italy 8.2%. Such a hit to one of Europe’s main industries would strain governments as billions would have to be paid out in sick leave and the private sector would require government support to stay afloat. 

 

Governments need to mobilise social security nets to protect their citizens from the effects of the virus on the economy, though some workers have shifted to online work, many won’t have this option. Significant amounts of people will be left out of pre-existing social safety nets, around a fifth of Italian workers are self-employed and therefore do not qualify for sick-pay. 

 

Denmark has introduced a scheme which will compensate companies who lose 30% or 50+ of their workers if they don’t fire them. This is a good example of what is needed however, it’s uncertain whether countries without the extensive social security frameworks Scandinavian countries have will cope with such demand. 

 

Measures taken in the education sector also raise social security related concerns. As of the 18th of March over 100 countries closed their schools. For many children and parents this will prove to be a very burdening move. Roughly 26 million children in America qualify for free or cheaper meals whilst 22,000 children in New York City sleep in municipal shelters. 

 

The closure of schools in England is partial as the government hopes to allow key workers to remain at work. The closure of schools is a lose lose situation, either the virus spreads or millions of children are left without necessary support mechanisms and parents are forced out of work to look after them. Damage control in this instance will have to be extensive. 

 

The story of coronavirus is one of nuance. Governments must find the correct balance between suspending the institutions which allow the world to function like factories, education and travel whilst being restrained enough to not derail the economy and force billions into poverty. So far the world seems to be getting the message, however it is still early and only time will tell whether the societal and economic requirements of this crisis will be met.

 

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