Faced with the spread of the coronavirus, which threatens the world economy and caused a stock market crash, Donald Trump decided on Friday evening to draw the big guns in the face of the pandemic. The President has declared a national emergency, which will make it possible to release up to $ 50 billion to fight the epidemic of Coronavirus Covid-19.
During a press conference, Donald Trump invoked the “Stafford Act”, which frees up an envelope of federal aid to the states, territories and municipalities of the United States, in order to cover the costs of health and hospitalization and any other need related to the health emergency created by Covid-19.
Washington will notably be able to draw from the $ 42 billion in funds allocated by the Congress to manage natural disasters. The action will be coordinated by the Federal Emergency Management Agency (Fema), responsible in particular for helping victims of hurricanes and floods. The American Congress had already adopted last week a first installment of $ 8.3 billion in public assistance.
Washington to buy oil to support producers
Donald Trump also said that Alphabet, the parent company of Google, is helping the government develop a website to determine if a screening test is necessary and refer patients to the nearest testing centers and health services. .
In addition, the American president announced that the United States was going to buy a large quantity of oil to reinforce its strategic reserves of black gold. A measure to support American oil companies, whose stock prices have plunged for a week, after the outbreak of a price war by Saudi Arabia.
Wall Street appreciates and bounces by more than 9%!
After a big disappointment, Wednesday evening, faced with the first announcements of Donald Trump, Friday’s declaration this time gave again the hope that the American authorities have taken the measure of the health threat and will be able to coordinate their efforts to support their economy in the face of the Covid-19 crisis.
The American dung beetle indices, which rebounded by around 3% before the presidential announcement, reacted by a surge of more than 9% at the close, and oil prices rebounded by more than 4%. Oil stocks have increased their rebound after declarations by Donald Trump referring to massive purchases of black gold by the United States to strengthen their strategic reserves: Chevron (+ 9.4%), Occidental Petroleum (+ 20%) Marathon Petroleum (+ 8.8%) ExxonMobil (+ 2.5%) Schlumberger (+ 12%) and Transocean (+ 15.7%).
US Congress Prepares Support Legislation
At the same time, on the side of the Congress, Nancy Pelosi, the president of the House of Representatives negotiates with the legislators and the White House the adoption of a “package” of aid to the American economy facing the Covid-19, including in particular financing sick leave for 14 days and covering screening costs. The legislation could be voted on in the House as early as Friday evening, if the differences are resolved.
Earlier today, Secretary of the Treasury Steven Mnuchin tried to reassure, believing that the impact on the US economy of the Covid-19 coronavirus epidemic should be short term. On the CNBC channel, Mnuchin said the US Treasury and the Federal Reserve are working to keep the markets open and provide “unlimited liquidity”. He also said that an economic aid package was “close” to adoption in Congress.
The European Union will raise a fund of 37 billion euros
For their part, European countries are stepping up measures to stem the growth of Covid-19 (school closings, cancellations of public events, mobilization of health services, etc.) The European Union announced on Friday the implementation instead of a fund with 37 billion euros (up from the 25 billion euros initially planned), and confirmed that it would relax its financial rules in the face of current exceptional circumstances.
European Commission President Ursula von der Leyen has indicated that EU authorities will be flexible in applying EU rules on budget deficits and state aid, which will give Italy – the European country most affected by the epidemic – total flexibility in its spending.
“I am convinced that the European Union can absorb this shock,” she said at a press conference. “But each member state must assume its responsibilities fully and the European Union as a whole must be determined, coordinated and united.”
G7 meeting scheduled for Monday via video conference
Internationally, G7 leaders (Germany, Canada, United States, France, Italy, Japan and the United Kingdom) will meet by videoconference Monday to discuss a coordinated response to the coronavirus crisis, said on Friday Elysium. Emmanuel Macron and Donald Trump agreed to this meeting during a telephone interview
France has asked the European Commission to consider stricter control or even restrictions on access to the borders of the Schengen area, it said the same source.