Big Promises on Virus Fight Now Need Details

(Bloomberg) --

Three trillion dollars and counting. That’s how much governments around the world are pledging to inject into their economies to help companies and ordinary people weather the coronavirus outbreak.

Central banks meanwhile are piling in with rate cuts and their own liquidity measures. All the big guns are being fired.

But while on paper it sounds like a lot, in reality it’s unclear when, or even whether, the money will flow to where it’s needed. Having made announcements about supporting small- and medium-sized businesses, many governments now need to figure out how that will actually work.

There’s not much time to iron it out.

As lockdowns spread across Europe, the U.S., and the Middle East — and with parts of Asia facing a second round of the virus — a global recession will become a reality. Many economies rely on casual labor, on service industries, on tourism and travel, all of which is grinding to a halt. There’s talk in some countries of nationalizing large companies whose collapse would create systemic risk.

Leaders are increasingly using the language of war when they talk of the virus and the need for lockdowns. In some places, the army is now being deployed to ensure people stay indoors. It’s harder than ever for a corner shop to keep going, let alone find the right bureaucrat to help them locate the correct form to access government aid.

Global Headlines

Virus surge | With Europe now the epicenter of the outbreak, Italy surpassed China with the most coronavirus deaths, as fatalities reached 3,405. Despite the devastating impact on the economy, Prime Minister Giuseppe Conte said he’ll extend a nationwide lockdown beyond the March 25 deadline.

• Japan was one of the first countries outside of China hit by the coronavirus and now it’s one of the least-affected among developed nations. Gearoid Reidy explains why this is puzzling health experts.
• Unlike Asia and Africa, western governments didn’t have plans and teams ready for the pandemic. Marc Champion and Iain Marlow report on why Italy’s rich-world health care system has buckled.

Key partnership | House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin have forged the most important relationship in Washington, Saleha Mohsin reports, as lawmakers work to stop an economic collapse from the coronavirus. Mnuchin has become Pelosi’s primary connection to the administration after last year’s impeachment inquiry damaged her relationship with U.S. President Donald Trump beyond repair.

• Click here for more on the industries clamoring for a piece of the proposed $2 trillion stimulus package.
• Four senators who sold shares after receiving sensitive briefings in late January about the emerging virus threat are now under scrutiny.

Not backing down| President Vladimir Putin is determined not to submit to what Russia sees as oil blackmail from Saudi Arabia, as the unprecedented clash between the former OPEC+ allies continues to roil markets. While crude may fall below $20 a barrel, the Kremlin is confident it can hold out longer than Riyadh, Ilya Arkhipov, Evgenia Pismennaya, Dina Khrennikova and Olga Tanas report. Trump called the price war “devastating to Russia.”

Russian meddling | Documents taken off two Russian operatives arrested in Libya shed new light on Moscow’s apparent efforts to build influence in the oil-rich North African state at a time of U.S. disengagement. As Samer Al-Atrush reports, the cache revealed details of meetings with Saif Al-Islam Qaddafi, the son of deposed, deceased dictator Moammar Al Qaddafi, and Russia’s offer to help facilitate the return of the Qaddafi name to power.

Venezuela showdown | The Organization of American States plans today to elect its secretary-general in a test of the popularity of Trump’s firm policy against Venezuelan President Nicolas Maduro. If the U.S.-supported incumbent and favorite Luis Almagro loses, it would be a setback for the White House in America’s backyard.

What to Watch

• Finland was again crowned as the world’s happiest country, extending its lead over Denmark and Switzerland, according to a United Nations-affiliated research network. Afghanistan was the least happy.
• India’s slowing economy is in for more pain after Prime Minister Narendra Modi appealed to citizens to stay home to curb the coronavirus.
• A rising chorus by athletes, the public and even Trump to delay or cancel the 2020 Tokyo Olympics has paralyzed Japan’s politicians and organizers.

Pop quiz, readers (no cheating!). As the world goes into lockdown, which political leader was out hugging and kissing supporters. Send us your answers and tell us how we’re doing or what we’re missing at balancepower@bloomberg.net.

And finally ... The widespread shutdown in Europe and the U.S. over the coronavirus is having a devastating impact in an unexpected place: Kenya’s flower industry. As David Herbling writes, a crash in demand has forced the largest exporter of cut flowers to Europe to destroy roses, which are popular at events including royal parties in the U.K. “Almost the entire market has collapsed,” says Kenya Flower Council CEO Clement Tulezi. “Technically, our industry is on lockdown.”

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