COVID-19 AND FISCAL MEASURES IN EUROPE

1. Immediate fiscal impulse: Additional government spending (such as medical resources, keeping people employed, subsidizing SMEs, public investment) and foregone revenues (such as the cancellation of certain taxes and social security contributions). These types of measures immediately lead to deterioration of the budget balance without any direct compensation later.
2. Deferrals: Several governments have decided to defer certain payments, including taxes and social security contributions, which in principle should be paid back later. These measures improve the liquidity positions of individuals and companies but do not cancel their obligations. Therefore, these measures cause deterioration of the budget balance in 2020, but improve it later. A few countries have also deferred the servicing of loans or the payment of utility bills, which also improve the liquidity positions of those impacted. Even if the loans were granted by private banks and utilities are provided by private providers, the budget balance will deteriorate in 2020 because of lower profits and consequent taxes, but will improve later.
3. Other liquidity provisions and guarantees: These measures include export guarantees, liquidity assistance, credit lines through national development banks. Some of these measures improve the liquidity position of the private sector, but unlike deferrals which are automatic and generally apply to the target group, credit lines require action from the impacted companies. Credit lines and guarantees might not weaken the budget balance in 2020, but would create contingent liabilities which might turn into actual expenses either in 2020 or later.

France: Date of announcement: 12 March 2020

1. Immediate fiscal impulse: € 27.2 billion (1.1% of 2019 GDP)
2. Deferrals: € 228 billion (9.4 % of 2019 GDP)
3. Other liquidity and guarantee measures: € 300 billion (12.4% of 2019 GDP)

Germany: Dates of announcement: 9 March 2020, 13 March 2020, 23 March 2020, 24 March 2020

1. Immediate fiscal impulse: € 150 billion (4.4% of 2019 GDP)
2. Deferrals: € 500 billion (14/6% of 2019 GDP)
3. Other liquidity and guarantee measures: € 1,103 billion (32.2% of 2019 GDP)

Italy: Date of announcement: 17 March 2020

1. Immediate fiscal impulse: € 16 billion (0.9% of 2019 GDP)
2. Deferrals: € 230.7 billion (13.0% of 2019 GDP)
3. Other liquidity and guarantee measures: € 130 billion (7.3% of 2019GDP)

Spain:  Date of announcement: 12 and 17 March 2020

1. Immediate fiscal impulse: € 8.8 billion (0.7% of 2019 GDP)
2. Deferrals: € 24.4 billion (2.0% of 2019 GDP)
3. Other liquidity and guarantee measures: € 112.4 billion (7.3% of 2019 GDP)