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How are European governments dealing with the Covid-19 crisis?

All over Europe, countries are closing their borders, states are quarantining their populations, health measures are being stepped up to deal with the pandemic... but while waiting for a return to normality, governments are also taking steps to support the travel industry, which is under severe pressure in the world's leading tourist destination.

Spain

The second country most affected by the crisis, the state of alert was declared on Saturday 14 March for a period of 15 days in the Iberian country. All events, religious processions and other gatherings had to be cancelled or postponed as a result.

Rail transport (mainly the company RENFE) will reduce its traffic by 80% and air transport by half. As the epidemic spreads throughout the country, hotels are being converted into temporary hospitals to make up for the lack of space in the existing health structures in Madrid. Chains such as Kike Saralosa, Room Mate Hotels, Soho Boutique Hotels, and others have participated in this technical assistance from the hotel community. In Catalonia, B&B Hotels has joined the mutual aid movement.

In the meantime, the other properties are waiting for the storm to pass. The Spanish Confederation of Hotels and Accommodation has so far considered the aid offered by the government to businesses affected by the temporary halt in tourist activity to be insufficient. A budget dedicated to the crisis with conditions for the granting of financial aid is currently under consideration. This budget would primarily concern small businesses and self-employed persons in the sector. The next meeting of the Government Cabinet is scheduled for Tuesday 17 March.

Germany

The German Government has stated that it will provide unlimited liquidity support to German companies affected by the pandemic. This would be a measure unprecedented since the Second World War, as "the most comprehensive and effective support and guarantees ever in a crisis," according to German Economics Minister Peter Altmaier.

Pending the arrival of this financial aid, the state across the Rhine has also announced the immediate suspension until September of the legal obligation for companies facing serious liquidity problems to file for bankruptcy within three weeks. This solution is intended to help companies heavily impacted by the pandemic to overcome this ordeal while waiting to receive liquidity, particularly from the state.

These various measures were taken after the President of the European Commission, Ursula von der Leyen, promised EU member states a large flexibility so that they could increase their spending accordingly and thus help their companies to overcome this difficult situation.

United Kingdom

The UK government has allocated a budget of £12 billion to provide "temporary, timely and targeted measures to provide security and stability for people and businesses" in the context of the Coronavirus outbreak.

In addition to this budget allocation, the government also announced several measures to help businesses heavily impacted, including for small and medium-sized companies the recovery of statutory sick pay (SSP) paid to people on sick leave due to Covid-19, as well as a 100% reduction in business charges and a temporary business interruption loan programme, set up by the British Business Bank, to provide loans and bank overdrafts to businesses in trouble.

In spite of all these solutions, the British trade association UKHospitality (UKH) expressed its concern about the coronavirus, which is said to be an "existential threat" to the hospitality industry, in an open letter to Rishi Sunak, the Chancellor of the Exchequer. UKH Chief Executive Kate Nicholls reported that a "significant number of jobs" would be at risk by May if additional measures such as allowing "temporary staff redundancies", in the event of a drastic staff reduction, suspension of payments to HMRC for three months, or Government Statutory Sick Pay payments to all hospitality businesses, were not taken.

Italy

As the country most affected by the epidemic in Europe enters its second week of total containment, multiple solutions are being considered. The government met on Sunday to draw up a decree known as "Cura Italia" to provide solutions for the country's businesses and families, a decree which is expected to release a budget of €25 billion to support the Italian economy.

Among the resources available are fiscal measures such as the postponement of the payment of taxes such as VAT or social security contributions for companies is delayed until 20 March, and for the companies most affected, particularly in tourism (accommodation, travel agencies, ...) or culture (museums, theatres ...) is even delayed until the end of May.

Another measure concerning employees with children is that additional paid leave of up to 50% of the amount can be granted in order to care for their children during the period of national containment, as well as a €600 voucher can be offered to pay for childcare costs.

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