ICAEW.com works better with JavaScript enabled.

Government action: news in brief

News and views on national government actions to support the recovery and lead nations out of the crisis.

28 July 2020: New research by the Peterson Institute of International Economics and Bruegel suggests that the headline sums promised by governments to help companies withstand the COVID-19 crisis don't necessarily correlate with the actual commitments to individual companies.

24 July 2020: EU leaders reached a historic agreement to jointly raise €750bn in common debt to respond to the COVID-19 pandemic. The funds, to be disbursed as grants (€390bn) and loans (€360bn), are additional to the €1.07trn seven-year budget. 

24 July 2020: A resolution adopted yesterday by MEPs calls for further changes to the agreed multi-annual budget plans, particularly calling for a reversal of some of the cuts made to proposed allocations for health, education, research and innovation programmes. MEPs also want more democratic accountability over recovery funds. 

24 July 2020: In the official communiqué, G20 ministers pledged to use all available policy tools to counter the economic consequences of the coronavirus. Banks’ lending capacity will remain under review. The group also re-iterated calls for a global solution on digital tax and tasked the Financial Action Task Force to remain vigilant to the impact of new technology on AML. 

24 July 2020: The European Banking Authority (EBA) has published a list of the 47 public guarantee schemes issued in response to the pandemic across the EEA. 

24 July 2020: Using green bonds to raise 30 percent of the EUs recovery fund would boost issuance by almost 90 percent compared to 2019 and provide a ‘safe green asset’ for investors, according to a report by S&P Global.

17 July 2020: State aid should not be given to companies with links to tax havens. New Commission recommendations call on EU countries to avoid granting financial support to companies that have links to the countries on the EU’s list of non-cooperative tax jurisdictions as well as to companies that have been convicted of serious financial crime. While the ultimate decision lies with national capitals, the Commission asks that countries provide information on the steps taken to comply with the recommendation. An evaluation will be published by 2023. 

17 July 2020: ECB to prioritise climate as well as stability in strategy review. ECB President Christine Lagarde stated that the review will be extended into 2021 with deliberations on climate change and financial stability unbundled, with separate discussions, papers and impact assessments.

17 July 2020: Start of special EU Summit on recovery funds and multi-annual budget.

3 July 2020: EU opens borders to 14 countries, excluding US – EU countries are starting to lift restrictions on non-essential travel, including for Australia, Canada, Japan, New Zealand, South Korea and Thailand. China is included on the agreed list – which will be reviewed every fortnight – subject to reciprocity. 

23 June 2020: UK citizens’ climate assembly urges green stimulus post-lockdown, so that economic recovery measures can achieve climate goals.

15 June 2020: UK-EU agree to accelerate FTA negotiations, concluding that “new momentum” is required and there will be no extension to the transition period at the end of December.

12 May 2020: National Infrastructure Commission writes to the Chancellor about investment in infrastructure, focusing on productivity and competitiveness, regional support and sustainability.

9 June 2020: EU to launch major trade policy review focusing on how to ensure the EU’s “open strategic autonomy”, considering supply chains, the green and digital transition, support for SMEs and how to ensure a “level playing field”.

9 June 2020: Economic and Monetary Affairs Committee MEPs approve more flexibility for EU banks to lend to companies and households.

9 June 2020: The UK and Japan are poised to begin talks aimed at reaching agreement on a post-Brexit trade deal.

8 June 2020: The World Bank says the coronavirus pandemic will cause global economic output to contract by 5.2% in 2020, as more than 90% of the world’s economies have fallen into recession.

8 June 2020: Business Secretary Alok Sharma is creating five business-focused groups to help economy recover from the coronavirus pandemic.

5 June 2020: Sweden has adopted a regulatory framework that will enable the issuance of green bonds, allowing investors to understand how eligible expenditures are defined, selected, recorded and reported. 

3 June 2020: The European Commission is consulting trade unions and employers’ organisations on how to ensure fair minimum wages to reduce rising wage inequalities and in-work poverty.

29 May 2020: Euromonitor has made available a webinar called: ‘Coronavirus: implications on megatrends’.

28 May 2020: EU recovery spending to follow “do not harm” green oath. Plans will not threaten global goals.

28 May 2020: Review of payment holidays during COVID-19 pandemic in place. The Bank of International Settlements has published research on payment deferral programmes and potential risks.

25 May 2020: European Parliament starts tracking COVID-19 impact on banks and the first report focuses on the potential capital impact of credit commitments. 

21 May 2020: President Moon Jae-in of South Korea has stressed the need to safeguard jobs and the industrial ecosystem amid the COVID-19 crisis, reports the Korea Times.

20 May 2020: Germany is still reluctant to link stimulus packages with climate targets; reports Euractiv.

18 May 2020: California is now offering support to undocumented immigrants, in the first relief fund of its kind, says CNN.

18 May 2020: France and Germany have agreed to establish a €500bn Recovery Fund at the EU level for solidarity and growth.

18 May 2020: Rome has adopted a new €55 billion stimulus package. The package includes a number of measures to support families, businesses and public health.

18 May 2020: An EU minimum income framework is needed, according to Madrid, Lisbon and Rome. Ministers from the three capitals are said to be calling for a legally binding framework that allows member states to establish basic minimum incomes appropriate for their respective standards of living.

15 May 2020: 'Bold and visionary': MEPs demand 'massive' €2tr EU green recovery package.

15 May 2020: Coronavirus could cost global economy $8.8 trillion, City AM has reported.

15 May 2020: China will likely spend about $205 billion this year on projects ranging from 5G networks to power grid enhancements to rail upgrades as it tries to revive its economy after the coronavirus pandemic, according to BloombergNEF.

14 May 2020: Reuters reports that Germany plans a fiscal splurge despite plunging tax revenues.

14 May 2020: The LSE has published an article that says that the UK investment fund for high-growth firms is a step in the right direction; but this second-wave policy tool to deal with Covid-19 may have design flaws that undermine demand.

13 May 2020: India has unveiled a $60bn credit line for small businesses and lenders hit by the lockdown. The allocation is part of a $266bn fiscal and monetary package.

13 May 2020: The UN has called for ambitious commitments from countries in the way they treat psychological illness, amid a potential global spike in suicides and drug abuse.

13 May 2020: S and P Global has published a report entitled ‘U.S. And China Kick Trade Deal Can Down The Road’. It comments that “trade tension was rising amid political rhetoric, U.S. efforts to relocate supply chains from China, and technology decoupling”.

13 May 2020: Economies across the regions of the European Bank for Reconstruction and Development (EBRD) may contract on average by 3.5 per cent this year, because of the impact of the coronavirus, with a rebound of 4.8 per cent possible in 2021, says an EBRD report.

13 May 2020: EU Commission publishes guidance on how to safely resume travel and reboot Europe's tourism in 2020 and beyond. The aim is to help Member States gradually lift travel restrictions and allow tourism businesses to reopen, after months of lockdown, while respecting necessary health precautions.

10 May 2020: Britons want quality of life indicators to take priority over economy, says a Guardian article, commenting on the results of recent polls. They show that a majority would like ministers to prioritise health and wellbeing over GDP during coronavirus crisis.

4 May 2020: Will COVID-19 fiscal recovery packages accelerate or retard progress on climate change? This is a report freely available from the Oxford Smith School of Enterprise and the Environment.

1 May 2020: A COP26 Universities Network Briefing has been published called A net-zero emissions economic recovery from COVID-19. It says that, collectively, recovery packages will strongly influence whether the global Paris Agreement targets are met.

1 May 2020: The Implications of COVID-19 for the Global Economy is a Euromonitor International webinar that is available to all. The webinar looks at the possible economic outcomes globally and what this means for government policies, businesses and consumer behaviour.