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Bailouts are inevitable thanks to coronavirus – but taxpayers have to be treated fairly

We have to establish some clear principles, for government but also for ourselves, writes Hamish McRae

Sunday 22 March 2020 14:48 GMT
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Airlines are among the businesses that have been hit hard by the coronavirus crisis
Airlines are among the businesses that have been hit hard by the coronavirus crisis

Governments around the world have to nurse the hardest-hit industries through this coronavirus crisis. But they also have to be fair to taxpayers who fund the inevitable bailouts. Getting that balance right will be a key element of economic policy in the weeks ahead.

It is easy for governments and central banks to launch huge macro-economic interventions. The governments can and are taking on wartime powers and applying wartime financial actions. The first aim of course is to combat the virus, and Germany and Italy are now asking their car manufacturers to help produce more medical equipment, including ventilators.

But at a macro-level they have to help their economies through what is going to be a recession akin to that of 2009 – maybe deeper, though not as long. Some industries are particularly hard hit. Airlines, the hospitality industry, and high street retail are in the front line, but others will be hit in ways that have yet to feed though.

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