Spanish coronavirus crisis deepens after deadliest day of outbreak brings another 769 deaths
|National Post 27 Mar 2020 at 16:55|
Spain suffered its deadliest day yet of the coronavirus outbreak as Prime Minister Pedro Sanchez convened an emergency cabinet meeting to try to chart a way out of the crisis rapidly engulfing the nation.
The Health Ministry on Friday reported another 769 deaths, lifting the total number of fatalities to 4,858. Confirmed cases climbed to 64,059, with Spaniards near the end of the second week of a state of emergency set to last at least until April 11.
The country is on almost complete lockdown and the government is counting on limited social interactions helping contain the spread of the disease, which has already killed more people than in China where the pandemic originated.
Spain is grappling with one of Europe’s worst outbreaks alongside Italy. The head of the World Health Organization tried to rally support for the battle against the disease, even as some world leaders like U.S. President Donald Trump question the need for extreme measures.
On Friday, U.K. Prime Minister Boris Johnson became the first world leader to say he has tested positive. Johnson, who was criticized for being slow to react to the epidemic, is self-isolating in his Downing Street offices with “mild symptoms” after a test confirmed he has the illness. Prince Charles, the heir to the British throne, also has the virus.
European Union leaders have largely recognized the danger but struggled to agree at a virtual summit Thursday on a joint strategy to limit the economic impact. They left key details to be hammered out in the weeks ahead as thousands fall ill and hundreds die each day across the continent.
In the absence of a shared EU response, national governments have been going it alone. In Germany, the upper house of parliament gave the final green light Friday to a package of measures totaling more than 750 billion euros ($826 billion).
They include a supplemental budget with new borrowing of 156 billion euros, as well as loans, guarantees and aid for companies. The government may also buy stakes in and even nationalize certain stricken businesses.
The Spanish government last week announced a stimulus package worth as much as 100 billion euros ($110 billion). It includes assistance for small and medium-sized enterprises — which account for the bulk of the nation’s economic activity and have been hammered by a collapse in demand — as well as tax deferments and loan guarantees.
Spain’s economy could shrink as much as 4.5% in 2020 due to the impact of the virus, according to a report published Friday by Banco Bilbao Vizcaya Argentaria SA.
“An extraordinary crisis like COVID-19 requires the use of all economic policy tools,” the bank said. “In this situation, fiscal-policy makers should do all they can to mitigate the possible permanent consequences.”
Italy’s health authorities have sounded cautiously optimistic, as the pickup in confirmed cases reported Thursday seems connected to more extensive testing. In a sign that containment measures may be working, the curve of the contagion’s spread started flattening slightly March 20, according to Silvio Brusaferro, the head of the country’s public health institute.
Lombardy Governor Attilio Fontana, who heads the region with the worst outbreak, said Friday that a decline in cases may come in days. Italy reports updated numbers at 6 p.m. local time.
Even as the spread seems to be slowing, evidence of its impact on the economy is starting to emerge. Confidence among Italian businesses crashed this month across all sectors. Consumer sentiment also deteriorated.
Alitalia, Italy’s bankrupt state airline, announced it will lay off almost 7,000 workers, while Arcelor Mittal’s Taranto steel mill, Europe’s largest by capacity, asked to temporarily suspend its whole staff, more than 8,000 people.
Italy’s gross domestic product may shrink by 6.5% in 2020, according to research group Prometeia. The government has pledged to launch a second stimulus package worth at least 25 billion euros in April, after approving a similar amount this month.
©2020 Bloomberg L.P.
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