The past weekend`s oil price war between Russia and Saudi Arabia delivered a second shock to the already economic disruption brought upon by the coronavirus. A third coup will follow, as the sharp falls in financial markets destroy wealth and magnify the damage to the economy of countries around the globe.
Covid-19 is an economic shock, hitting both supply — through factory shutdowns, disrupted supply chains and travel restrictions — as well as demand. Consumers who are ill or trying to avoid falling ill go out less and spend less.
Brussels will consider using flexibility in its state aid rules to help EU governments cushion businesses from the coronavirus fallout as officials discuss a widening array of measures aimed at battling the economic damage from the disease.
EU leaders were set to meet, via teleconference, on Tuesday to discuss pan-European emergency measures. This could include relaxing rules on state aid and co-ordinated fiscal stimulus because Covid 19 is spreading in all 27 member states.
Meanwhile, in Rome, the Italian government increased its emergency economic measures and suspended mortgage payments to mitigate the consequences of imposing nationwide quarantine restrictions as Europe battles to contain the largest outbreak of the novel coronavirus outside China.