Coronavirus: to save businesses, we should pioneer an unusual kind of insurance
The COVID-19 outbreak has triggered a collapse of revenues in sector after sector: transport, hotels, restaurants, tourism, recreation and culture, consumer durables and numerous others.
This economic shock, equivalent to a 10% or greater contraction in demand worldwide, is larger than that which triggered the 2007-09 global financial crisis.
In a rare professional consensus, economists of all schools agree that a major fiscal stimulus is required to offset this collapse in spending – and governments are acting accordingly. In the US, Steven Mnuchin, the treasury secretary, has obtained congressional approval for a US$2 trillion (£1.7 billion) stimulus that includes a US$500 billion (£426 billion) fund to support American businesses and plans to hand out thousands of dollars to households around the country.
Rishi Sunak, the UK chancellor, has announced that the UK government will pay 80% of the wages of employees who would otherwise be made redundant, adding an estimated £78 billion to the measures he announced previously. In Germany, the cabinet is aiming to mobilise €500 billion (£463 billion) of state funds – 14% of GDP – to rescue companies hit by the outbreak.
These measures are welcome but imperfect. For example, the UK plan to pay workers’ wages will not cover enough company overheads to prevent a large number of bankruptcies and lay-offs. Besides this, the UK government is also considering bailing out certain struggling companies, such as IAG, the owner of British Airways. This raises the prospect that taxpayer money will again be used to bail out wealthy corporations while the little people are left with the crumbs from the table.
Loughborough University is equipped with a live in-house broadcast unit via the Globelynx network. To arrange an interview with one of our experts please contact the press office on 01509 223491. Bookings can be made online via www.globelynx.com
Loughborough is one of the country’s leading universities, with an international reputation for research that matters, excellence in teaching, strong links with industry, and unrivalled achievement in sport and its underpinning academic disciplines.
It has been awarded five stars in the independent QS Stars university rating scheme, named the best university in the world for sports-related subjects in the 2019 QS World University Rankings, University of the Year by The Times and Sunday Times University Guide 2019 and top in the country for its student experience in the 2018 THE Student Experience Survey.
Loughborough is in the top 10 of every national league table, being ranked 4th in the Guardian University League Table 2020, 5th in the Times and Sunday Times Good University Guide 2019 and 8th in The UK Complete University Guide 2020.
Loughborough is consistently ranked in the top twenty of UK universities in the Times Higher Education’s ‘table of tables’ and is in the top 10 in England for research intensity. In recognition of its contribution to the sector, Loughborough has been awarded seven Queen's Anniversary Prizes.
The Loughborough University London campus is based on the Queen Elizabeth Olympic Park and offers postgraduate and executive-level education, as well as research and enterprise opportunities. It is home to influential thought leaders, pioneering researchers and creative innovators who provide students with the highest quality of teaching and the very latest in modern thinking.
The COVID-19 outbreak has triggered a collapse of revenues in sector after sector: transport, hotels, restaurants, tourism, recreation and culture, consumer durables and numerous others.
This economic shock, equivalent to a 10% or greater contraction in demand worldwide, is larger than that which triggered the 2007-09 global financial crisis.
In a rare professional consensus, economists of all schools agree that a major fiscal stimulus is required to offset this collapse in spending – and governments are acting accordingly. In the US, Steven Mnuchin, the treasury secretary, has obtained congressional approval for a US$2 trillion (£1.7 billion) stimulus that includes a US$500 billion (£426 billion) fund to support American businesses and plans to hand out thousands of dollars to households around the country.
Rishi Sunak, the UK chancellor, has announced that the UK government will pay 80% of the wages of employees who would otherwise be made redundant, adding an estimated £78 billion to the measures he announced previously. In Germany, the cabinet is aiming to mobilise €500 billion (£463 billion) of state funds – 14% of GDP – to rescue companies hit by the outbreak.
These measures are welcome but imperfect. For example, the UK plan to pay workers’ wages will not cover enough company overheads to prevent a large number of bankruptcies and lay-offs. Besides this, the UK government is also considering bailing out certain struggling companies, such as IAG, the owner of British Airways. This raises the prospect that taxpayer money will again be used to bail out wealthy corporations while the little people are left with the crumbs from the table.
Loughborough University is equipped with a live in-house broadcast unit via the Globelynx network. To arrange an interview with one of our experts please contact the press office on 01509 223491. Bookings can be made online via www.globelynx.com
Loughborough is one of the country’s leading universities, with an international reputation for research that matters, excellence in teaching, strong links with industry, and unrivalled achievement in sport and its underpinning academic disciplines.
It has been awarded five stars in the independent QS Stars university rating scheme, named the best university in the world for sports-related subjects in the 2019 QS World University Rankings, University of the Year by The Times and Sunday Times University Guide 2019 and top in the country for its student experience in the 2018 THE Student Experience Survey.
Loughborough is in the top 10 of every national league table, being ranked 4th in the Guardian University League Table 2020, 5th in the Times and Sunday Times Good University Guide 2019 and 8th in The UK Complete University Guide 2020.
Loughborough is consistently ranked in the top twenty of UK universities in the Times Higher Education’s ‘table of tables’ and is in the top 10 in England for research intensity. In recognition of its contribution to the sector, Loughborough has been awarded seven Queen's Anniversary Prizes.
The Loughborough University London campus is based on the Queen Elizabeth Olympic Park and offers postgraduate and executive-level education, as well as research and enterprise opportunities. It is home to influential thought leaders, pioneering researchers and creative innovators who provide students with the highest quality of teaching and the very latest in modern thinking.
