What seemed like a distant issue last December is now well and truly a global concern. From Wuhan, COVID-19 has now landed in over 80 countries, including our own, and the death toll abroad is on the rise. Understandably, governments are taking severe measures to minimise the virus’ spread as much as possible, and I urge each and every one of us to be responsible in our actions in the coming days and possibly weeks.
By now, it is clear that the spread of the COVID-19 virus is impacting our economy negatively – both on a national as well as a global scale. A pandemic is rarely just a health issue: it almost always has a severe ripple effect on our economy, grinding it to a halt, despite our collective efforts to minimise this impact.
The first sector to bear the brunt of this slowdown, for obvious reasons, has been the tourism sector. This week alone, the Maltese Government has banned travel to and from several countries, and strongly recommended cancelling all non-essential travel. Similarly, the United States has banned European travel. The situation is surreal, with images emerging of iconic landmarks around the world, usually bustling with hundreds of tourists, suddenly deserted.
The impact of COVID-19 on tourism has been instant and widespread. From airlines to cruiseliners, hoteliers to tour guides, these past weeks have been detrimental to the sector. The figures reported by the International Air Transport Association so far indicate that airlines could lose as much as 113 billion dollars as a result of decreased demand, coupled with stringent regulations on airport slots. Two major cruise line operators, Viking and Princess, have suspended their global operations. For some context on this major decision, Princess Cruises alone serves approximately 50,000 passengers every day.
In many ways, the virus’ spread is a test: it is testing the resilience of a fickle sector, which depends almost entirely on individual choice, but also on the ability of governments and supranational institutions to react as efficiently as possible to a unique crisis.
At a European Union level, measures are being taken, but I cannot say I am satisfied so far. The Commission’s Corona Response Investment Initiative is welcomed, but the 25 billion Euro pledged so far (the substantial part of which is not fresh money), fall short of the economic impact predicted, and despite statements being issued, it remains unclear whether State Aid rules will be relaxed.
That is why this week, I submitted an urgent Parliamentary Question to the Commission on whether it intends to revise its State Aid rules, and if so, when and how it will do so. The current regime is too rigid, and smaller, insular Member States like Malta have always been disadvantaged as a result, because they effectively bar Government from assisting businesses or particular economic sectors which may need an extra push to survive. I submitted my question because this has never been more evident than the present. Will Government be allowed, for instance, to provide assistance to our national airline, which is already feeling the impact of a decrease in demand?
It is obvious that moving forward, our tourism sector, which is mostly composed of small to medium businesses, will need assistance to recover, and I am adamant that the economic slowdown should not result in poor working conditions for the thousands employed in the tourism and hospitality sector, or worse, unemployment.
Governments and institutions must act decisively, and immediately, or the greatest lasting damage caused by this pandemic will be economic.
Josianne Cutajar is an MEP