LONDON: Britain said it would launch a £330 billion ($399 billion) lifeline of loan guarantees and provide a further £20 billion in tax cuts, grants and other help for businesses facing the risk of collapse from the spread of coronavirus.
Finance minister Rishi Sunak repeated his pledge to do “whatever it takes” including further action if needed to help sectors from retailers to bars and airports which are reeling from a near-shutdown of their businesses.
“This is not a time for ideology and orthodoxy,” Sunak said on Tuesday, speaking alongside Prime Minister Boris Johnson. “This is a time to be bold, a time for courage.”
Britain, criticized by some scientists for moving more slowly than other European countries to prevent the spread of the virus, ramped up its response on Monday when it told people to avoid pubs, clubs, restaurants, cinemas and theaters.
The coronavirus death toll in Britain rose by 16 to 71 on Tuesday.
Sunak said he was including all retail, hospitality and leisure businesses in the suspension of a property tax, alongside the new loan guarantee program which was equivalent to 15% of British economic output.
Companies from those sectors would be offered cash grants and the government would discuss a support package for airlines and airports.
Britain’s biggest airports including Heathrow and Gatwick have warned that they face the threat of a complete shutdown without government help.
Banks and lenders would offer a three-month mortgage holiday for people in difficulty, Sunak said.
He later told lawmakers, some of whom criticized the business focus of the plan, that the government would soon make a statement about support for renters.
Sunak described Tuesday’s package of measures as unprecedented, although Britain issued guarantees of around £1 trillion
during the global financial crisis.
The Institute for Fiscal Studies, a think-tank, said Sunak would need to “come back with more” and Allan Monks, a JP Morgan economist, said that excluding the loan guarantees, the size of Britain’s stimulus measures for this year was “likely to look small compared to the economic shock underway.”
The Bank of England said it would set up a new fund with the finance ministry to buy commercial debt with a term of up to one-year issued by investment-grade companies making a “material contribution” to Britain’s economy.
It added that the fund would be financed out of the creation of central bank reserves — in other words with new money, much like the BoE’s quantitative easing program.
Earlier on Tuesday, Britain’s budget forecasters said the scale of the borrowing needed to fight the coronavirus hit to the economy might resemble the country’s immense debt splurge during World War Two.
“Now is not a time to be squeamish about public sector debt,” Robert Chote, head of the Office for Budget Responsibility, told lawmakers.
“We ran during the Second World War budget deficits in excess of 20% of GDP five years on the trot and that was the right thing to do.”
On Monday, French President Emmanuel Macron said his government would guarantee 300 billion euros worth of loans, and promised that no French company would be allowed to collapse.
New Bank of England Governor Andrew Bailey promised “prompt action” on Monday, less than a week after an emergency rate cut by the BoE which took its benchmark rate to just 0.25%.
Investors are watching for another rate cut, possibly before the BoE’s next scheduled announcement on March 26.
The central bank is also expected to expand its £435 billion government bond buying program.
UK unveils $420 billion lifeline for firms hit by coronavirus
UK unveils $420 billion lifeline for firms hit by coronavirus
NATO wants ‘automated’ defenses along borders with Russia: German general
- That zone would act as a defensive buffer before any enemy forces advanced into “a sort of hot zone,” said Lowin
- The AI-guided system would reinforce existing NATO weapons and deployed forces, the general said
FRANKFURT: NATO is moving to boost its defenses along European borders with Russia by creating an AI-assisted “automated zone” not reliant on human ground forces, a German general said in comments published Saturday.
That zone would act as a defensive buffer before any enemy forces advanced into “a sort of hot zone” where traditional combat could happen, said General Thomas Lowin, NATO’s deputy chief of staff for operations.
He was speaking to the German Sunday newspaper Welt am Sonntag.
The automated area would have sensors to detect enemy forces and activate defenses such as drones, semi-autonomous combat vehicles, land-based robots, as well as automatic air defenses and anti-missile systems, Lowin said.
He added, however, that any decision to use lethal weapons would “always be under human responsibility.”
The sensors — located “on the ground, in space, in cyberspace and in the air” — would cover an area of several thousand kilometers (miles) and detect enemy movements or deployment of weapons, and inform “all NATO countries in real time,” he said.
The AI-guided system would reinforce existing NATO weapons and deployed forces, the general said.
The German newspaper reported that there were test programs in Poland and Romania trying out the proposed capabilities, and all of NATO should be working to make the system operational by the end of 2027.
NATO’s European members are stepping up preparedness out of concern that Russia — whose economy is on a war footing because of its conflict in Ukraine — could seek to further expand, into EU territory.
Poland is about to sign a contract for “the biggest anti-drone system in Europe,” its defense minister, Wladyslaw Kosiniak-Kamysz, told the Gazeta Wyborcza daily.
Kosiniak-Kamysz did not say how much the deal, involving “different types of weaponry,” would cost, nor which consortium would ink the contract at the end of January.
He said it was being made to respond to “an urgent operational demand.”
