By Howard Schneider, William Schomberg and Michael Nienaber
WASHINGTON/LONDON/BERLIN (Reuters) – If Round One of the coronavirus relief effort was the economic equivalent of “shock and awe,” new plans being developed by the world’s biggest economies for more assistance to businesses and consumers are taking a narrower and more tactical approach.
Governments around the world went in big, hard and fast in their initial efforts to blunt the economic hit from the global pandemic, drumming up roughly $10 trillion in spending plans through June, according to International Monetary Fund estimates. Central banks levered that up further with rate cuts, bond purchases and a raft of other credit programs.
But with President Donald Trump in quarantine after testing positive for COVID-19 and a resurgence in cases in Europe and the United States, there is an acknowledgment that the recovery is far from complete. Government and central bank officials are now devising more targeted follow-up programs they hope will help the industries and people still displaced in the global downturn.
With tens of millions remaining unemployed, this second round of government aid will still be counted in the trillions of dollars. Major industries remain under stress from the restrictions imposed last spring to try to halt the coronavirus, and public trust in routine activities like restaurant dining has not been restored.
This time around, officials are betting the virus can be suppressed without reverting to broad lockdowns, ideally allowing a global economic recovery to largely proceed. Their gamble will determine whether the world heads into 2021 poised for recovery and able to take full advantage of any successful vaccine – or climbing from an even deeper hole.
Rising caseloads “put governments in the unenviable position of trying to limit the damage to public health, while avoiding stringent measures to limit economic and