I remain unconvinced that in the ongoing debates about the huge economic problems being caused by the corona virus pandemic, matters are being laid out clearly enough.

It seems that the period we are now in constitutes a crisis of a greatly different kind to the eruption of 2008. At that time, an economic and financial crisis was set to destroy many global banks. Today we are experiencing a public health crisis which is stifling production and consumption, while spreading a very contagious disease among the general public.

Till the public health challenge is overcome, both production and consumption will continue to sink. Keeping them afloat requires a huge effort and we do not know how long that will take. But it has to be done, at enormous expense, using funds on which no return should be expected, except that of achieving an outcome that ensures the survival of the economic machine: it will have been greatly weakened but still afloat.

This is where the second phase kicks in: till it lasts, the dilapidated economy has to be dosed with measures that will recondition it to the point where new wealth and jobs are again being generated. This second phase too will require lots of funds but now, one would at least expect that they can offer some financial return – which will hardly apply to the funds expended on the first phase.

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ENOUGH?

The European Central Bank, the European Commission, the European Investment Bank have launched their projects intended to mobilise the funds required by which Europe can face out the present crisis. National governments on the other hand, including Malta’s, have organized their separate programmes, all very robust, to build their own cover  against the storm.

In Europe, there has been mounting disquiet because governmental debts are again going to ramp up. But another worry has also been growing: are the assembled funds going to be enough?

In the US, the government has voted the sum of two trillion dollars – an unprecedented amount – as its first strike in the American response to the corona attack. How does the US effort compare to what is being done in Europe at the level of the EU plus the national levels of its member states?

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ITALY ON THE CROSS

The huge losses that Italy has suffered –and is still suffering – require from all EU member states a deep show of sympathy and solidarity. For long years, the country will be burdened with the consequences of what has been happening, even as it will be coming to terms with very big economic and social losses.

Ordinarily, I do not much agree with proposals that tie European countries into “federal” arrangements. Yet in this case I would agree that Malta participates in all European projects meant to alleviate Italian suffering. It is true that we also have our troubles which might be much bigger than what is currently prospected and hoped for. So we must be prudent.

But there is a time for prudence and a time for solidarity. Without putting prudence to one side, we should understand that this is a time for solidarity, which we have to show to others, according to our size and abilities, and in a way that makes its mark.