The most beautiful game is a game with numbers. That game best shows where we are and what we are, but sometimes it can hurt, sometimes it can scare. Sometimes it can be easy, and then it's just necessary to observe those numbers as something that is and something that should guide us in which direction we should go. Fact, it shouldn't be hard, right?
Then let's play. The text will mostly deal with millions, often billions, because in this situation we only mention millions, as if thousands became small. Here we will look at three dimensions: people, economy and states (governments).
What happens to people? How are they living in April 2020?
They mostly sit at home... If someone had said in January that what is happening right now would happen, probably everyone would have thought that he was not in his right mind or that he was a born pessimist... However, from the very small number of people who were infected with the corona virus at the end of 2019, already at the beginning of April 2020, the figure reaches 1 million. What will happen in May? Will the heat reduce the spread of the virus, will life knock on our door again? I can't answer that question, but I can assume one thing for sure, both in May and June, and much later, the corona will be mentioned, maybe not as a pandemic, but as an economic storm!
Let's not forget another million, which is that the projections of international organizations are that due to the pandemic, over 25 million people will lose their jobs. How many millions of people is that, if we know that most of these 25 million people feed their families from these jobs. A big problem in a pandemic situation, where great world hysteria reigns, and an even bigger problem for the future, where economic hysteria will obviously reign. Now we need to look at trillions... It is best to start with economies. And the biggest ones...
It is difficult at this moment to give a precise figure on how much damage the corona has caused on a global level. However, it is clear that billions are involved. It is clear that it brought slow economic growth, even below the level of the year 2008 when the financial crisis "destroyed" the global market, it is clear that it will also bring slow economic growth in the following years. Now the situation is such that production is suspended, tourism does not work, everything else is on the edge of existence. And for later it remains to be seen, it depends on when the pandemic will slow down and how the world's largest economies will react, which at this moment are trying to keep the economy alive with "urgent measures". Because it is the only thing that is the backbone of the development of society as a whole and the only thing that can create real money, which we need now more than ever!
The state - assuming responsibility, financing the unplanned... Until when?
If we were to look at the role of the state from the outside, we must admit that this part is perhaps the most complicated situation. From the point of view of power, it is obvious that the state is gaining more and more support and is consolidating its position. On the other hand, states are torn between recovery measures and current costs. It is clear that in this case as well, billions of euros were spent from the budget, which were not planned, in order to mitigate the impact of corona, both on people and economies.
One thing is obvious, this year we cannot expect large investment expenditures by the states, we cannot expect positive trends in terms of salary increases. But, on the other hand, it can be expected that there will be a reduction in current costs, this can lead to a reduction in the number of employees in the public administration, which would cause even greater problems in this situation.
What is economically the smartest? It is difficult to forecast. But one thing is certainly not good - to adopt measures without economic analysis. A difficult period is ahead of us, it is a difficult period for all the economies of the world, but if we play badly in this period and if we "spend" more than we have, the difficult period is yet to come. It is not easy to recover from this blow that the corona caused to the global market, so how will those who, apart from the corona, need to pay for support measures, for which there are no funds in the budgets, recover.
Every economy that plans its development on the principles of sustainable development must help in this situation, both the economy and the most vulnerable citizens. Support measures must be implemented especially for small, micro and medium enterprises, which are the most vulnerable in this situation, and which employ a large number of employees. On the other hand, support should be provided to citizens, the most vulnerable, in order to overcome this period in the easiest possible way. For all these measures, social dialogue and the involvement of all relevant factors of society is the main lever for decision-making.
And finally, we should not demand from the Government unrealistic, as well as measures, which in the previous period were rejected as economically unjustified, under the pretext of recovery from the pandemic. We must be realistic even in these difficult times and not limit our horizons only to today and the next few months, but to observe much further.
We need to end this numbers game here, because we can go on like this for a long time. Now, apart from STAY HOME - which is now the priority, we also have to think about what to do when we go out, hopefully soon! We should not allow the situation that when we go outside, there will be much fewer jobs. For this reason, support measures for both the economy and citizens should be well thought out and in the best possible way to maintain social peace in these difficult times, but also to maintain as many jobs as possible.
The measures implemented to prevent the spread of the virus are expensive, and additional costs include various evacuations and the like, so we have to be rational and take care of ourselves and others in the first place, but also of public finances, which can be a problem later.
The author is an economic analyst
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