IMF Calls on Governments to Open Money Tap in Corona Struggle
In this time of crisis, governments need to turn up the money tap to fight the new coronavirus and support their own economies as much as possible.
With that recommendation, the International Monetary Fund (IMF) comes in a new report.
In recent times, policymakers around the world have already taken many corona measures, ranging from supplementary benefits and bankruptcy prevention measures to physical food packages for people in isolation.
According to the IMF, all these interventions add up to about $ 8 trillion.
It probably won’t stop there. Once the pandemic is under control, a globally coordinated stimulus through public investment appears to be an effective means of promoting economic recovery, the fund’s experts say.
“We don’t know enough to predict the timing and circumstances of the eventual recovery. But in times of need it is up to policymakers to do whatever it takes,” said Vitor Gaspar, who heads the IMF’s investigations into tax matters. He stresses that it is crucial to save lives and protect the population.
“Make sure you keep the receipts,” adds Gaspar. By this, he means that it is essential that countries record all their investments well, and also look closely at their own financial possibilities.
Not all measures directly lead to budget deficits and debts, but they often entail financial risks in the slightly longer term. Think of government guarantees for business loans, such as those that are also issued in the Netherlands. If those loans can never be paid back, the government will face costs later.