Governments pledge aid as global commerce seizes

Governments and central banks are scrambling to find ways to keep businesses from going bankrupt as the virus outbreak grinds the world economy to a halt.

There is tremendous market volatility, with the extent of economic damage from the pandemic still anyone’s guess. Factories are closed, retail stores are closed, travel has ground almost to a halt and billions of people are sheltering at home, going outside only to find essential supplies.

Big industry and small business are looking at a complete, or nearly complete halt to operations. Restaurants that have been shuttered employ hundreds of thousands of people. Airlines are grounding flights, meaning no crews are needed. The dilemma afflicts every sector of the national and global economy. The risk of frozen economic activity will ripple outward, from the banking and mortgage industry, to services ranging from dog walking to doctors visits. What nations are doing:

• The U.S. Federal Reserve started a lending facility to buy short-term loans from banks and companies to ease the flow of credit as the economy grinds to a halt. The Fed announced Tuesday that it is reviving a program it first used during the 2008 financial crisis to unclog a short-term lending market for what is known as “commercial paper.” Large businesses issue commercial paper to raise cash to meet payrolls and cover other short-term costs.

Borrowing rates in the commercial paper market have been spiking as more companies have sought to raise cash in the expectation that their revenue will plunge.

• Spain will mobilize the equivalent to one fifth of the country’s annual output in loans, credit guarantees and subsidies for workers and vulnerable citizens, Prime Minister Pedro Sánchez announced Tuesday. The measures passed by the Spanish Cabinet include allowing some families to delay their mortgage dues and ensure that workers who are temporarily laid off receive unemployment subsidies even if they don’t match the current criteria to qualify for them.

• Greece will provide funds to help businesses hit by a loss of revenue due to the conronavirus outbreak, while the state will pay part of employees’ salaries in affected sectors. Speaking in a televised address to the nation Tuesday, Greek Prime Minister Kyriakos Mitsotakis said all tax and social security contributions were also being suspended, while emergency measures would be taken in order to help secure jobs.

• France’s government pledged $50 billion in aid for small businesses. That’s in addition to tens of billions already promised for French workers forced to stop working because of store and restaurant closures and strict new confinement measures. French Finance Minister Bruno Le Maire announced the new aid will include tax breaks and a “solidarity fund” for struggling small businesses. “This epidemic will be a catastrophe for all countries of the world,” he said. “The shock will be violent.”

• Sweden’s central bank will buy securities for up to an additional $31 billion and offer more loans to banks on favorable terms

• New Zealand vowed Tuesday to spend billions of dollars supporting distressed companies with its economy headed for recession. The stimulus package is equivalent to 4% of GDP.

A large chunk of the new spending will go to businesses that have lost more than 30% of their income as a result of the downturn. Other money will go toward health costs, income support, and the airline industry. presidential election.

Ford Motor Co. will shut down all of its vehicle and engine factories in Europe starting Thursday to help contain the coronavirus and because sales are down and parts are running short. The company expects the shutdown to last for a number of weeks, but reopening depends on spread of the virus, national restrictions, parts supplies and dealer stock requirements.

Vehicle plants in Cologne and Saarlouis in Germany and the Craiova plant in Romania will halt production starting Thursday. The company’s engine and vehicle assembly plant in Spain stopped work on Monday after three confirmed coronavirus cases among workers.

Supplies to Ford factories in Europe have been increasingly interrupted, and vehicle sales have declined as some countries have forced dealers to close sales operations.