COVID-19

How Europe can support its economy as the COVID-19 outbreak grows

Victoria Craig Mar 11, 2020
HTML EMBED:
COPY
The European Central Bank benchmark rate already sits at a record low of -0.5%. Thomas Lohnes/Getty Images
COVID-19

How Europe can support its economy as the COVID-19 outbreak grows

Victoria Craig Mar 11, 2020
The European Central Bank benchmark rate already sits at a record low of -0.5%. Thomas Lohnes/Getty Images
HTML EMBED:
COPY

Six weeks ago, the European Central Bank was optimistic about the eurozone economy thanks to improving business sentiment, recovering global trade and a de-escalation in U.S.-China trade tensions.

But that was before the COVID-19 outbreak.

Last week, the Federal Reserve stunned markets with an emergency half a percentage point rate cut, and central banks in Japan and the U.K. vowed to take part in a coordinated global effort to support financial markets and maintain economic stability.

On Thursday, the ECB will decide whether to commit to that promise, too.

But economists have warned there’s little scope for the central bank to act since its benchmark rate already sits at a record low of -0.5%.

Aside from further slashing rates into negative territory, investors say the bank could expand the asset purchase program it restarted last year, or provide new lending systems for small businesses hit by coronavirus disruption.

President Christine Lagarde has said the ECB is “ready to take appropriate and targeted measures” to address the crisis. She just may need to dig deeper in her monetary policy toolbox to find the right recession fighting fix.

COVID-19 Economy FAQs

With a slow vaccine rollout so far, how has the government changed its approach?

On Tuesday, Jan. 12, Health and Human Services Secretary Alex Azar announced changes to how the federal government is distributing vaccine doses. The CDC has expanded coronavirus vaccine eligibility to everyone 65 and older, along with people with conditions that might raise their risks of complications from COVID-19. The new approach also looks to reward those states that are the most efficient by giving them more doses, but critics say that won’t address underlying problems some states are having with vaccine rollout.

What kind of help can small businesses get right now?

A new round of Paycheck Protection Program loans recently became available for pandemic-ravaged businesses. These loans don’t have to be paid back if rules are met. Right now, loans are open for first-time applicants. And the application has to go through community banking organizations — no big banks, for now, at least. This rollout is designed to help business owners who couldn’t get a PPP loan before.

What does the hiring situation in the U.S. look like as we enter the new year?

New data on job openings and postings provide a glimpse of what to expect in the job market in the coming weeks and months. This time of year typically sees a spike in hiring and job-search activity, says Jill Chapman with Insperity, a recruiting services firm. But that kind of optimistic planning for the future isn’t really the vibe these days. Job postings have been lagging on the job search site Indeed. Listings were down about 11% in December compared to a year earlier.

Read More

Collapse

As a nonprofit news organization, our future depends on listeners like you who believe in the power of public service journalism.

Your investment in Marketplace helps us remain paywall-free and ensures everyone has access to trustworthy, unbiased news and information, regardless of their ability to pay.

Donate today — in any amount — to become a Marketplace Investor. Now more than ever, your commitment makes a difference.