Covid-19 and the economy: both curse and blessing?

Coronavirus continues to spread, with the number of registered cases in Italy having risen to more than 320. Many observers fear the epidemic will also cause major economic damage due to production losses, disrupted supply chains and a decline in consumption. Others sense opportunities amid the dangers.

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Kurier (AT) /

Global economy under quarantine

It's not only in China that the measures being taken are reminiscent of martial law, Courier criticises:

“French Economy and Finance Minister Le Maire on Tuesday pathetically referred to the disease as a 'game-changer for globalisation'. But this is exactly where the problem lies. The question is whesther politicians shouldn't change the rules they abide by. Because the virus appears to have caught the Politburo in Beijing just as off guard as it did Europe's chancelleries. The most visible sign of this impotence are measures that are more or less reminiscent of those of martial law. But precisely these measures pose a far greater threat to the global economy than the virus itself. The economy is being quarantined with plant closures and curfews.”

Jutarnji list (HR) /

Potentially more than a trillion dollars in losses

It's already obvious that the virus will have huge repercussions for the global economy but what exactly they will be is not yet clear, Jutarnji list points out:

“Oxford Economics, one of the leading institutes for economic forecasting, has warned that a potential pandemic could lead to a reduction of 1.3 percent in global economic annual growth, equivalent to 1.1 trillion (a thousand billion) dollars in lost revenues. However, all forecasts remain speculation until we can assess the negative consequences of this virus on human health - and how the market reacts. Asian and European stock markets continued to fall yesterday, while the three key US indexes have recorded a slight increase even as we go to print.”

De Standaard (BE) /

Less unbridled consumption

The restrictions imposed in the battle against the coronavirus outbreak could also have a beneficial effect, De Standaard reflects:

“It makes no sense to fly off the cuff and erect barriers that unnecessarily hinder the circulation of goods in the European Union. That being said, perhaps all this will also bring benefits. The first pictures of empty shelves in department stores are already circulating. Even before there is any real talk of delivery problems, they raise the question of how much sense our distribution systems make. Perhaps we'll see that we can actually get by on less. Fewer goods, fewer choices, and fewer lorries on the road. As a rehearsal for the other threat - the climate crisis - this virus is actually doing us a favour.”

Verslo žinios (LT) /

A boost for entrepreneurial thinking

Verslo žinios also believes the epidemic could have positive effects:

“This situation will hopefully also open up unexpected opportunities - for new suppliers, new customers and new contracts. International companies are ready to place some of their orders in Europe. ... Entrepreneurs aren't panicking but looking for solutions, even if the mood is tense and the economic consequences are still unclear. ... In fact they can even see the crisis having certain positive effects: they've learned to plan better, to react flexibly to last-minute changes and to adapt to circumstances as they develop.”

Večer (SI) /

A scourge and a goldmine

Večer suspects that the corona panic is also a profitable business:

“Ten years ago, the Council of Europe complained that because the WHO had wrongly declared the swine flu a pandemic, countries had spent billions of taxpayers' money on vaccines that in the end weren't needed. The same thing happened in 2006 as a result of the panic over avian flu. We will only know what happens with the coronavirus once it's all over and nobody is talking about it any more. It's already clear, however, that manufacturers of respirator masks and staple foods will make a profit while other industries make losses. Viruses that appear suddenly and spread throughout the world seem to be a new trigger for economic crises in modern capitalism and an opportunity to milk the taxpayers.”

Kommersant (RU) /

Stability must now be bought

In Kommersant, Alexander Gabuev, China expert at the Moscow Carnegie Center, sees the country slipping into a full-blown crisis due to the epidemic:

“Additional weeks of quarantine would not only lower the demand for oil and the transport volume in China - the latter has already decreased by 20 percent - they would also be a huge blow to business and households. The New Year holidays have been extended to February 10, but could continue with the quarantine. Polls say that the liquidity buffer of Chinese small and mid-sized businesses will stretch to pay employees for a month or two at most. Some companies are already sending their people on unpaid leave. To avoid social unrest, unprecedented direct government aid at all levels could be necessary.”

Helsingin Sanomat (FI) /

Democracies are more resilient

Helsingin Sanomat believes that the virus could also have political consequences:

“Travel restrictions, the closure of factories and consumers' fears are causing greater economic losses than during the Sars epidemic. The current measures to contain the epidemic are likely to cause more economic damage than the epidemic itself. ... Business is based on trust. The people's trust in the Communist Party's ability to guarantee a stable standard of living has been dealt a blow. One-party systems are less able to cope with cracks in the facade than democracies. In democracies, epidemics pose a threat to public health. In authoritarian societies they also threaten the system itself.”

Le Figaro (FR) /

China's Chernobyl

Le Figaro paints an even more graphic picture:

“Officials terrorised by Xi's absolute power didn't dare to deliver the bad news about the virus. Could this secret which has proven deadly for many Chinese also prove fatal for the all-powerful Chinese Communist Party? Looking back, Mikhail Gorbachev believes that the 'real cause' of the USSR's collapse was the Chernobyl nuclear disaster which occurred six years earlier. ... Instead of giving an account of what happened, Beijing's reflex is to strengthen censorship in the name of 'stability'. This episode could mark the end of the 'Chinese model' which, thanks to China's astonishing economic growth, sought to export itself as an alternative to US influence. Who wants to follow the example of the fiasco surrounding the corona virus?”

Novi list (HR) /

When the Chinese stop travelling...

Novi list points to the knock-on effects of coronavirus for the European economy:

“The epidemic will not only cut growth in the Chinese economy but will also impact global supply chains, most of which converge in China. This is where 28 percent of the global industrial production takes place. China has the largest trade volume in the world, larger than that of the US. ... Travel and tourism companies around the world, in Europe and indeed in Croatia, stand to suffer because people are traveling less out of fear of the infection spreading. Most tourists today are Chinese and spend an annual 260 billion dollars abroad, according to the World Tourism Organization - that's twice as much as the Americans.”

Cinco Días (ES) /

Europe must brace itself for economic impact

Cinco Días is surpised by Europe's passivity:

“It is logical to assume that the measures for restricting movement of people will be extended to goods transport, which will be a blow to international trade that will far surpass any effects on tourism. ... But our governments are being surprisingly passive in the face of such risks, with not one of them having announced steps to mitigate the potential economic impact of the Coronavirus. The Euro Group, so active on other issues, has not so much as convened.”