Headlines

France is promising €45 billion ($50.16 billion) in immediate aid for businesses and employees hit by the coronavirus pandemic, which is slowing or shutting down swaths of the global economy, The Wall Street Journal reported. French Finance Minister Bruno Le Maire, speaking Tuesday morning in a radio interview, said that his provisional predictions show the response to the coronavirus will slash 1% from France’s gross domestic product in 2020. The government plans to present a revised budget law for 2020 with the new prediction later Tuesday, Mr. Le Maire said.

Fashion chain Laura Ashley has filed for administration, putting up to 2,700 jobs at risk, after rescue talks were halted by the coronavirus outbreak, The Irish Times reported. The troubled retailer, which has five outlets in the Republic, had been in talks with stakeholders over refinancing, but it said its “revised cash flow forecasts and increased uncertainty” mean it will not be able to secure these funds in sufficient time. Its largest shareholder Mui Asia said it was unable to support the retailer with “financial support in the required timeframe”.

Volkswagen Group, the world’s biggest carmaker, is suspending production at factories across Europe as the coronavirus pandemic hits sales and disrupts supply chains, the company said on Tuesday, The Irish Times reported. The German carmaker, which owns the Audi, Bentley, Bugatti, Ducati, Lamborghini, Porsche, Seat and Skoda brands, also said that uncertainty about the fallout from coronavirus meant it was impossible to give forecasts for its performance this year.

By now it should be clear that monetary policy cannot cure coronavirus. But central bankers can certainly aggravate the market symptoms, the Financial Times reported. That is the accusation being levelled at Christine Lagarde after a remark she made last week that triggered a sell-off in parts of Europe’s bond markets. It is not the European Central Bank’s job, the president said, to “close the spread” between the bonds of different member states. Clearly, some traders thought it was, judging from the subsequent slide in Italian debt.

Airbus announced plans to halt operations at its plants in France and Spain for four days as the coronavirus crisis spread from battered airlines to the manufacturing sector, The Irish Times reported. The most serious across-the-board disruption in Airbus production since a strike at then British partner BAE Systems in 1989 pushed its shares down 7 per cent as a rebound in other European shares quickly faltered.

British chancellor Rishi Sunak on Tuesday announced state loan guarantees worth £330 billion (€363 billion) along with a further £20 billion of financial handouts to help struggling businesses cope with the economic catastrophe caused by the rapid spread of coronavirus in the UK, The Irish Times reported. The UK chancellor said the rescue package – which comes on top of £7 billion in financial support for businesses announced in last week’s budget – included a one-year break from business rates as well as government grants of up to £25,000 for struggling retailers and pubs.

Supermarket shelves are being cleared and in financial markets, cash is the only precious commodity, the Financial Times reported. The hoarding of cash by banks, investors and companies illustrates the vast wave of deleveraging that is taking place across financial markets with the echoes of 2008 getting louder and louder. The real economy and financial system are joined at the hip. Financial market dislocations have prompted emergency rate cuts by central banks, actions that have done little to ease financial stress.

As Italy confronts the ravages of an unexpected threat in the coronavirus, fears are intensifying that the economic damage could trigger a far more familiar danger — a banking crisis, the International New York Times reported. Italy’s banks and their formidable piles of bad loans have long constituted a central worry in an economy that has not grown in more than a decade. The nation’s lenders are at once big enough, sufficiently integrated with the world, and adequately shaky to pose a constant menace to the global financial system.

Ghana is setting a $2-billion estimate for the restructuring of contracts with independent power producers to reduce the country’s bill for excess capacity and to settle arrears, according to two people familiar with the matter, Bloomberg News reported. While Finance Minister Ken Ofori-Atta already pledged to allocate $1 billion from February’s Eurobond sale, the country is also talking with multilateral lenders such as the World Bank to help raise a further $1 billion, said the people who asked not to be identified because the matter is private.

Italy is set to increase the taxpayer bill for keeping bankrupt airline Alitalia SpA aloft to more than 2.1 billion euros ($2.3 billion) over about three years, and the spending is unlikely to stop there, Bloomberg News reported. A new 600 million-euro loan included in a coronavirus stimulus package being discussed by Prime Minister Giuseppe Conte’s cabinet, is part of a plan to re-nationalize the loss-making carrier, according to the latest draft of the document. That’s double what was initially planned, people familiar with the matter said on Saturday.