How to stop coronavirus crashing your economy

Business Daily

BBC

News, Business

4.4 • 796 Ratings

🗓️ 11 March 2020

⏱️ 19 minutes

🔗️ Recording | iTunes | RSS

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Summary

As much of Italy goes into self-imposed quarantine, what can the authorities do to stop empty shops and restaurants going bust?

It's an urgent question for Marco d'Arrigo, who runs the California Bakery chain in Milan, who has spent his day reassuring nervous staff at their eerily empty branches.

Nations facing spiralling coronavirus cases and to need to lock down entire cities, do have macroeconomic tools at their disposal. But in Italy's case, those tools are not entirely in Rome's hands. Ed Butler speaks to Francesco Giavazzi, economics professor at Bocconi University, and to Ferdinando Giugliano, economics columnist for Bloomberg Opinion, both of whom have confined themselves to their Milanese homes.

Plus what crisis-management lessons can governments draw from the experience of the US during the 2008 financial crisis? Ed speaks to someone who was at the epicentre - former deputy secretary to the US Treasury Sarah Bloom Raskin.

Producer: Laurence Knight

(Picture: An Italian State Police officer and a soldier stand guard at a checkpoint at Milano Centrale train station; Credit: Emanuele Cremaschi/Getty Images)

Transcript

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0:00.0	Okay, yes, we've had a problem here.
0:01.9	13 minutes to the moon, season two.
0:04.6	Nothing made sense in those first few seconds.
0:07.5	Episode 1, available now.
0:13.0	Hello there, welcome to Business Daily from the BBC World Service.
0:17.2	On today's show, Italy locks its doors to ward off coronavirus. Until three days ago,
0:23.8	life was normal. Now, Milan is closer to one of the Chinese cities we've seen in pictures in the
0:30.4	past month. The city is now empty. So what are the consequences of lockdown for one of Europe's
0:36.4	most indebted economies?
0:38.2	And what should policymakers be looking out for?
0:40.4	The danger comes when consumers stop traveling, stop shopping, companies are forced to lay off workers,
0:50.1	then you really start to create the dynamics of a recession.
0:54.3	How to keep the economy moving, just as people are hunkering down.
0:57.7	Business Daily from the songwriter, we stay at house. We stay at home from his own living room. Anyway, it Or at least, I hope it was his own living room.
1:29.0	Anyway, it's become a popular anthem for self-isolation this week
1:32.2	as Italy takes the extraordinary step of announcing lockdown across the entire country.
1:37.7	The Prime Minister Giuseppe Conti has ordered people to stay at home
1:41.1	and seek permission for all essential travel.
1:44.3	Michael Darigo runs a chain of bakeries in central Milan. He told me on Tuesday what it felt like
1:49.4	to be a retailer at the moment. I run seven bakeries in Milan. Normally we are crowded of people
1:55.7	50% from Milan, 50% tourism. Right now, the situation is no people, no tourism.
2:03.6	The government obliged us to close at 6 o'clock in the afternoon.
	...

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