A historic deal on the UK’s future trading and security relationship with the European Union has been struck on Christmas Eve, a week before the end of the Brexit transition period.

As the country leaves the single market and customs union on 31 December, new arrangements allowing for tariff-free trade in goods and close police and judicial cooperation will come into force.

The announcement followed a final call between Boris Johnson in Downing Street and the European commission president, Ursula von der Leyen, in her Berlaymont headquarters in Brussels – at least the fifth such telephone conversation over the last 24 hours.

The trade agreement – running to 2,000 pages – is unprecedented in scope, containing provisions on subjects varying from civil nuclear cooperation and energy interconnections to fishing and aviation.

A No.10 spokesman said: “The Deal is done. Everything that the British public was promised during the 2016 referendum and in the general election last year is delivered by this deal.

“We have taken back control of our money, borders, laws, trade and our fishing waters. The deal is fantastic news for families and businesses in every part of the UK. We have signed the first free trade agreement based on zero tariffs and zero quotas that has ever been achieved.”

Von der Leyen was more sombre in her comments at a press conference in Brussels.

“At the end of a successful negotiation I normally feel joy. But today I only feel quiet satisfaction and frankly speaking relief,” she said. “I know this is a difficult day for some and to our friends in the United Kingdom, I want to say parting is such sweet sorrow but to use the line from TS Elliot, what we call the beginning is often the end. And to make an end is often a beginning. So to all Europeans I think it is time to leave Brexit behind.”

The deal guarantees “zero tariff and zero quota” trade on goods worth £668bn in 2019. But it will also mean significant costs to businesses as exporters face a host of border checks from 1 January and its ends freedom of movement for most UK nationals.

The Downing Street spokesman said, however, that the agreement would guarantee that the UK was “no longer in the lunar pull of the EU, we are not bound by EU rules, there is no role for the European Court of Justice and all of our key red lines about returning sovereignty have been achieved”.

The statement went on: “It means that we will have full political and economic independence on 1st January 2021. A points-based immigration system will put us in full control of who enters the UK and free movement will end

“We have delivered this great deal for the entire United Kingdom in record time, and under extremely challenging conditions, which protects the integrity of our internal market and Northern Ireland’s place within it.

“We have got Brexit done and we can now take full advantage of the fantastic opportunities available to us as an independent trading nation, striking trade deals with other partners around the world.”

The prime minister told his cabinet late on Wednesday night that the deal respected the sovereignty of both sides, as he urged senior figures to help him sell it.

On Wednesday, the Brexiter European Research Group of Conservative MPs said it would ask a self-styled “star chamber” of lawyers to scrutinise the terms before giving its support.

The agreement avoids a no-deal exit that the Office for Budget Responsibility had warned would reduce Britain’s economic output by £40bn in 2021 and cost more than 300,000 jobs.

The UK left the EU on 31 January but has benefited from continued membership of the single market and customs union over the last year, with British citizens retaining the right to freedom of movement around the bloc.

The end of the transition period will bring widespread changes for British businesses and citizens, as a new chapter in the country’s relationship with its neighbours begins.

Businesses will face extra paperwork and costs when trading with the UK’s biggest export market. Freedom of movement for most UK nationals will end, with restrictions imposed on stays in EU member states. As a “third country” to the EU, coronavirus travel restrictions could be imposed on UK nationals as of 1 January.

The agreement will nevertheless be a matter of huge relief to millions of people on both sides, four and a half years since the UK decided to leave the EU in June 2016. The negotiations, staged in Brussels and London, had weaved precariously through a pandemic, appearing doomed to failure at several points.

Only two weeks ago, Johnson told the cabinet to prepare for a no-deal exit, warning the public that such an eventuality was “very, very likely”.

The sticking points at the end of the talks had been on EU access to British fishing waters and Brussels’ demand for rules that would ensure neither side could gain a competitive advantage in trade as their rulebook diverged over time.

In the final days, it had been future EU access and quotas in British fishing waters, an issue of small economic impact but high political salience for both sides, that was the difference between a deal and a breakdown in talks.

The EU had offered a six-year transition period for phasing in a 25% reduction in the catch by value taken by European fleets in British waters, with access guaranteed to a six to 12 nautical mile zone from the British coastline.

Downing Street had tabled a counter-proposal of a three-year transition period with a 60% reduction – and no access to the nautical zone.

The compromise involves a transition period of five and a half years to phase in the changes, according to sources, with the UK accepting a 25% repatriation of quotas. But Downing Street has knocked back attempts by the EU to establish a mechanism under which changes to the quotas in the future could lead to tariffs on British exports. The issue had been key to No 10’s claims to have taken back control of British waters.

Following the announcement of a deal, the European commission sent the draft treaty to the member states. Should the 27 capitals be content with the deal, ministers on the council of the EU will agree on provisional application of the agreement on 1 January.

EU ambassadors were due to meet on Thurday morning to take the first step. The European parliament declined to stage a vote of consent this year given the lack of time for scrutiny. MEPs will have their say later next month.

Source: The Guardian

Shares of gun makers have been gaining ground as Democratic candidate Joe Biden leads polls, and if he wins the presidential election in November there are expectations of a renewed surge in gun sales that could drive shares even higher.

Shares of Smith & Wesson Brands and Sturm Ruger  have both rallied around 8% since late September, mirroring Biden’s widening lead in the polls since his debate against President Donald Trump. The S&P 500 is up 4% in that period.

Fears about the coronavirus pandemic, civil unrest related to protests over racial justice and worries about a potentially disputed presidential election on Nov. 3 have created a surge in gun demand this year. Smith & Wesson CEO Mark Smith last month said the industry was unable to keep up with demand.

A victory by Biden and his vice presidential running mate Kamala Harris, who favor increased gun regulation, could further stoke demand for firearms – and shares of firearms makers – particularly if Democrats wrest control of the Senate from Republicans, giving them majorities in both houses of Congress and making it easier to approve legislation.

“Should we see a Biden-Harris administration get elected, I would anticipate a surge in sales of modern sporting rifles, high-capacity magazines and corresponding ammunition,” said Aegis Capital analyst Rommel Dionisio, using an industry term for military-style rifles, a high-margin product category for firearm manufacturers.

An aggregation of betting odds by RealClearPolitics reflects a 65% chance Biden will defeat Trump, up from 55% before the Sept. 29 presidential debate.

Smith & Wesson’s stock is up 135% this year, while Sturm Ruger has gained 51%.

Shares of Sturm Ruger surged nearly 900% in the eight years from Democratic President Barack Obama’s election victory in November 2008 to the November 2016 election, which Trump won. Sturm Ruger is up just 10% during Trump’s nearly years in office. During the same 2008 to 2016 period, the S&P 500 rose about 113%.

Biden has promised to prohibit the sale of military-style rifles and high-capacity magazines, similar to a 10-year ban that expired in 2004. He also promises to require owners of military-style weapons to either sell them to the government or register them with the government.

Shares of gun makers surged ahead of the 2016 election on expectations Democratic candidate Hilary Clinton would win. Trump’s victory drove the industry into a two-year slump, with customers no longer worried they would lose access to firearms.

Firearm sales surged anew in 2020 due to fears related to the pandemic, and following social unrest in several U.S. cities and calls to defund police departments.

Federal background checks, a proxy for firearm sales to U.S. consumers, in the first nine months of 2020 reached 28.8 million, even before the typically busy holiday shopping season, topping the record 28.4 million checks done in the 2019 full year.

First-time buyers made up 40% of gun sales in early 2020, compared to an average of 24% in recent years, according to a survey of gun shops by the National Shooting Sports Foundation, a trade association.

Even if Trump wins a second term and dispels expectations of gun control measures, the potential for renewed protests against across the deeply divided country could drive additional demand for handguns for self-defense, Dionisio said.

(Source: Reuters)

The EU called Friday on the United States to lift tariffs imposed in a long-running dispute over aircraft subsidies after Airbus said it had brought itself into compliance with World Trade Organization rulings.

The billions of dollars in tariffs, which apply to a wide range of food and agricultural goods in addition to planes, have been even more burdensome due to the economic disruption caused by the coronavirus pandemic.

Airbus said Friday it had reached agreement with the French and Spanish governments that raises the interest rates on funds provided to help develop its long-haul A350 jet to levels the WTO considers appropriate.

The European Commission said this removes any grounds for the US to maintain tariffs imposed on EU exports under WTO rulings as well as making a strong case for a rapid settlement of the dispute.

“Unjustified tariffs on European products are not acceptable and, arising from the compliance in the Airbus case, we insist that the United States lifts these unjustified tariffs immediately,” EU trade commissioner Phil Hogan said in a statement.

– Epic legal battle –

An epic legal battle between Airbus and Boeing at the WTO began in 2004 when Washington accused Britain, France, Germany and Spain of providing illegal subsidies and grants to support the production of a range of Airbus products.

A year later, the EU alleged that Boeing had received $19.1 billion worth of prohibited subsidies from 1989 to 2006 from various branches of the US government.

The two cases were then tangled up in a legal quagmire, with each side being given partial vindication after a long series of appeals and counter appeals.

In 2019 the WTO authorised the US to impose up to 100 percent in taxes on $7.5 billion of European goods, its biggest ever penalty.

Washington then slapped 25 percent tariffs on a number of EU goods including wine, cheese and olives.

A 10 percent tariff on Airbus planes was increased to 15 percent in March, which also affects US airlines which buy Airbus aircraft, as the manufacturer points out.

In June the US threatened to levy tariffs on another $3.1 billion in EU goods as it has been authorised to do under a WTO ruling.

– Resolution in ‘mutual interest’ –

Airbus said the impact of those tariffs plus the coronavirus pandemic were the reason it was making the effort to resolve the dispute.

“The tariffs imposed by the United States Trade Representative (USTR) are currently harming all targeted industry sectors, including US airlines, and are adding to a very difficult environment as a consequence of the COVID-19 crisis,” the firm said.

Airbus said Friday that it “considers itself in complete compliance with all WTO rulings” after increasing the interest rate paid on the government funds it received.

The low interest rates on these funds were one of the arguments the US made that the EU was improperly subsidising Airbus.

“After 16 years of litigation at the World Trade Organization, this is the final step to stop the long-standing dispute and removes any justification for US tariffs,” said Airbus.

In addition to there no longer being a justification for the tariffs, the EU believes that in light of the global recession triggered by the coronavirus pandemic it makes sense to resolve the dispute.

“Especially under the current economic circumstances, the EU believes that it is in the mutual interest of the EU and the US to discontinue damaging tariffs that unnecessarily burden our industries and agricultural sectors,” the Commission statement said.

Hogan noted a WTO decision is expected soon that could give the EU the right to impose tariffs against the United States.

“In the absence of a settlement, the EU will be ready to fully avail itself of its own sanction rights,” he warned.

Source: AFP

The International Chamber of Commerce (ICC) has established a new presence in Cameroon, building on the organisation’s regional focus in Africa.

On 23 June, ICC’s World Council approved the opening of a new regional office (known as a national committee) in Cameroon. ICC Cameroon, which is located in Douala, works in cooperation with the Chamber of Commerce, Industry, Mines, and Artisans of Cameroon. The new office is led by Perrial Jean Nyodog, as Chair, and Ebenezer Njanga, as Secretary General. Mr Nyodog is also the CEO of Tradex, which trades in oil and oil by-products, while Mr Njanga is also the CEO of the Free Market Foundation of Central Africa.

John W.H. Denton AO said: “We’re pleased to welcome ICC Cameroon to our growing community of regional offices around the world. As Cameroon is a critical economy in Central Africa, ICC Cameroon will equip local businesses – both large and small – with the expertise required to address emerging challenges and forge long-term solutions for the future.”

The opening of ICC Cameroon is the latest step in ICC’s regional expansion in Africa. In response to the COVID-19 pandemic, Mr Denton convened a landmark Sub-Saharan Africa action group that brought together participants from close to 20 African countries to discuss a wide variety of regional issues, including operationalising the African Continental Free Trade Area. This past week, ICC joined the United Nations Capital Development Fund (UNCDF) and other partner organisations to launch a major survey to understand the unique challenges faced by small- and medium-sized enterprises (SMEs) in least-developed countries (LDCs), such as Burkina Faso.

ICC Cameroon will add to the success of these regional initiatives, by strengthening dialogue with regional, continental and international business communities. Local commissions and working groups are being created by ICC Cameroon in the following areas: arbitration and law; banking and finance; e-Commerce and digital economy; energy and environment; intellectual property; international trade; marketing and communication; and transport and logistics.

Mr Njanga, ICC Cameroon’s Secretary General, said that his team is well positioned to strengthen commercial relations between Central African businesses and ICC’s global network of over 45 million companies. “ICC Cameroon is looking forward to working with the ICC Global Headquarters in Paris and with ICC offices and members around the world to bring the perspective of Cameroonian businesses to ICC’s policies and standards for global trade,” said Mr Njanga. “This partnership will strengthen ties between Cameroon and the international business community, which will lead to improved development opportunities for all.”

Mr Njanga also noted the timeliness of the announcement as the world continues to respond to the economic and social consequences of COVID-19. “ICC Cameroon’s action plan includes activities that will allow companies to efficiently tackle challenges and issues that negatively impact international trade – and more urgently – give support to Cameroon and the business community in our ongoing response against COVID-19.”

With the addition of Cameroon, ICC now operates national offices in 90 countries worldwide. ICC Cameroon becomes the latest national committee since ICC Vietnam, which opened in November 2019.

Culled from International Chamber of Commerce

Mask wearing, temperature controls, disinfection of aircraft: the International Civil Aviation Organization on Monday published a series of health recommendations for a pandemic-hit airline industry as it relaunches air travel.

The protocol was drawn up by an international task force formed by the Montreal-based ICAO with the help of other UN agencies like the World Health Organization and the powerful International Air Transport Association (IATA).

Its report on relaunching aviation in the wake of COVID-19 was expected to be approved Monday by the ICAO’s executive committee.

The changes being suggested are the most important for air travel since the massive security measures put in place after the September 11, 2001 attacks on the United States.

IATA’s director general, Alexandre de Juniac, unveiled the main measures proposed in the “best practices” guide at the end of last week.

The recommendations are intended to serve as a “framework” for assuring the safety of passengers and workers on planes and at airports.

On their arrival at airports, travelers should present a health certificate and undergo an initial temperature check, under the guidelines.

Online check-in before arriving at the airport should be given priority, and passages through security should be re-thought to limit physical contact and waiting in lines.

The wearing of a mask or face covering should be obligatory inside aircraft and terminals, where physical distancing of at least three feet (one meter) should be respected.

Aboard planes, passengers should wear masks, move as little as possible within the cabin, and not line up outside toilets to lessen the risk of infecting other passengers.

– ‘Global reference’ –

But the ICAO does not advocate leaving every other seat open to assure physical distancing, a restriction that the airline industry industry sees as a threat to its profitability.

The organization, nevertheless, asks passengers to remain as far from one another as possible, to the extent occupancy rates allow it.

It also advocates that food on board be pre-packaged and that aircraft be regularly disinfected.

Temperature checks should also be taken on a flight’s arrival, according to the recommendations.

The measures aren’t obligatory but they are the product of a broad consensus that imparts “an authority that will make them a global reference for the first time on this issue since the start of the COVID-19 crisis,” said Philippe Bertoux, France’s representative on ICAO’s board, which led the “task force” debate.

“These measures will facilitate a safe and sustainable return of the air travel,” Bertoux told AFP.

To reopen after having been grounded for months and brought to its knees financially, the airline industry is pressing for rules to be harmonized to reassure passengers and states that have closed their borders in an attempt to halt the spread of the virus.

The ICAO estimates that the pandemic will reduce the number of air passengers by 1.5 billion by the end of the year.

Source: AFP

Boeing Co (BA.N) says it is eliminating more than 12,000 US jobs as the largest American planemaker restructures in the face of the coronavirus pandemic.

Boeing also disclosed it plans “several thousand remaining layoffs” in coming months but did not say where those would take place.

Boeing is slashing costs as a sharp drop in airplane demand during the pandemic worsened a crisis for the company whose 737 MAX jet was grounded last year after a second fatal crash.

Boeing said it restarted 737 MAX production at a “low rate” at its Renton, Washington factory. Reuters reported in April that regulatory approval for the MAX was not expected until at least August.

Boeing shares closed up 3.3% at $149.52, then rose another 4.6% to $155.84 after hours on news of the MAX production restart.

The company announced in April it would cut 10% of its worldwide workforce of 160,000 by the end of 2020. Boeing said Wednesday 5,520 US employees will take voluntary layoffs, and also disclosed it was notifying 6,770 workers of involuntary layoffs.

Chief Executive Dave Calhoun told employees in an email the “pandemic’s devastating impact on the airline industry means a deep cut in the number of commercial jets and services our customers will need over the next few years, which in turn means fewer jobs on our lines and in our offices. … I wish there were some other way.”

CFRA analyst Colin Scarola upgraded Boeing to buy and raised his price target to $174 from $112 saying Boeing “can weather its current crises and grow over the long term.”

In April, Boeing recorded zero orders for the second time this year and customers canceled another 108 orders for the 737 MAX, compounding its worst start to a year since 1962.

Last month, Boeing raised $25 billion in a bond offering that allowed it to avoid taking government aid.

The job cuts include more than 9,800 employees in Washington State. Boeing said the “several thousand remaining layoffs will come in additional tranches over the next few months.”

Boeing said it expects to resume 737 MAX deliveries in the third quarter following regulatory approvals before gradually increasing to 31 per month during 2021.

The aerospace sector has been hard hit including many Boeing suppliers.

General Electric Co (GE.N) said this month it planned to cut its aviation unit’s global workforce this year by as much as 25%, or up to 13,000 jobs. SpiritAero Systems Holdings (SPR.N) announced it is cutting another 1,450 jobs in Kansas.

American Airlines to cut management, support staff by 30%

American Airlines Group Inc must reduce its management and support staff by about 30% and may have to cut frontline employees as it downsizes due to the coronavirus outbreak, showed a letter to employees made public on Wednesday.

All major US airlines have said they will need to shrink in the fall, once US government payroll aid that bans involuntary job cuts expires on Sept. 30.

Competitor United Airlines Holdings Inc has also said it will need to reduce its management and administrative staff by about 30%.

Despite the bailout and other liquidity raises, American must “plan for operating a smaller airline for the foreseeable future,” Executive Vice President of People and Global Engagement Elise Eberwein said in the letter.

American, with over 100,000 employees, will offer voluntary options before implementing involuntary reductions if there is not enough take-up, she said.

Once it has reduced its management ranks, the company will turn to frontline employees including flight attendants and pilots, who will receive fresh voluntary leave and early retirement options in June with the aim of avoiding involuntary furloughs.

“This is a goal, though, not a commitment, and a stretch goal at that,” Eberwein said, adding the company will be working with unions in coming weeks and months.

American has said it is accelerating fleet retirement and expects to fly roughly 100 fewer aircraft in the summer of 2021. Nearly 40,000 employees have already opted for temporary voluntary leave or early retirement.

Earlier, American Chief Executive Doug Parker said the airline hoped to avoid furloughs and rejected speculation that it or another major US carrier will have to file for Chapter 11 bankruptcy protection due to the coronavirus crisis.

(Source: Reuters)

Britain’s economy shrank by a record 5.8 percent in March as the Covid-19 crisis escalated and the government shut down much of the country, according to official data that point towards an even bigger hit to come.

The monthly drop in gross domestic product was felt in almost all sectors – from the country’s shuttered restaurants and bars to its building sites and factories – and was the largest since comparable records began in 1997.

“The sharp contraction in UK Q1 GDP comes as little surprise, but does clearly highlight the magnitude of the challenge facing policymakers,” JP Morgan market strategist Hugh Gimber said.

In the first three months of the year, GDP contracted by 2.0 percent from the last three months of 2019, the biggest drop since the depths of the financial crisis in late 2008, the Office for National Statistics said.

The Bank of England said last week that the contraction of the economy in the April-June period could approach 25 percent and lead to the largest annual decline in more than three centuries.

British two-year government bond yields sank to a record low of -0.045 percent after the data, reinforcing expectations that the Bank of England will ramp up its record £645 billion (€732 billion) of asset purchases next month.

Finance Minister Rishi Sunak said Britain was now in the midst of a significant recession.

“We have to support people’s jobs, their incomes, livelihoods at this time, and support businesses so we can get through this period of severe disruption and emerge stronger on the other side,” he said after the GDP data.

On Tuesday, Britain’s government extended a costly job support programme for another four months, though businesses will need to pick up more of the tab from August.

The decline in first-quarter GDP was slightly smaller than economists had forecast in a Reuters poll, and less than the 3.8 percent slump suffered by the euro zone in the first quarter.

The worst-hit country in Europe with more than 40,000 deaths from Covid-19 according to official data, Britain has been in extensive lockdown since March 23 – a later date than in many other euro zone countries.

Small steps to ease lockdown

England tentatively began easing its Covid-19 lockdown on Wednesday, with some people who cannot do their jobs at home urged to return to work, while Scotland, Wales and Northern Ireland, which have semi-autonomous governments, are sticking with a “stay at home” message for now.

UK Prime Minister Boris Johnson’s government has faced a barrage of criticism that its new guidance – stay alert, control the virus, save lives – was confusing.

Appearing on Sky News TV, Transport Minister Grant Shapps was asked why estate agents were being allowed to restart house viewings when people could not have their own relatives to visit.

“The truth of the matter is, you have to start somewhere. The lockdown message was very straightforward – it was just stay at home. Now as we start to unlock, of course, there have to be decisions made,” Shapps said.

“There is no perfect way of doing this, and we’d ask people to use their common sense … Right now, there has to be a cut-off somewhere.”

Workers were being advised to avoid public transport if at all possible, and schools remained closed, prompting questions about how parents and people who could not get to work by other means were supposed to apply the new guidance.

Employers faced the daunting task of creating safe environments for their staff, with detailed guidance on one-way systems at entry and exit points and in stairwells, spacing out workstations and other minutiae.

For those still working from home or unable to work, there was only a very slight change in the regime. People were now allowed out to exercise more than once a day, and two people from separate households were allowed to meet outdoors as long as they kept two metres apart.

Martin Hewitt, chairman of the National Police Chiefs’ Council, said officers would still be encouraging people to go home if they were out for reasons other than the authorised exercise, shopping for essentials, health or work.

Fines for transgressions have been increased.

“Everybody will carry on hopefully working in the spirit we’ve had for the last seven weeks,” he told BBC TV.

“It’s not for the police to police people being two metres apart, that’s about everyone’s individual responsibility. If there are those people who refuse to abide by the new regulations then we will move to enforcement if that’s what we have to do,” he said, describing that as a last resort.

(FRANCE 24 with REUTERS)

Chinese and US trade representatives agreed Friday to “create favourable conditions” for the phase one trade deal signed in January, Beijing officials said, despite recent tensions over the coronavirus pandemic.

China’s Vice Premier Liu He, who had led Beijing’s negotiations, held a call on Friday morning with US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, according to a notice from the Ministry of Commerce.

“Both sides said they should strengthen macroeconomic and public health cooperation, strive to create a favourable atmosphere and conditions for the implementation of the phase one US-China economic and trade agreement, promoting positive results,” the notice said.

The countries have also agreed to maintain communication and coordination.

The exchange took place after both nations recently traded barbs over the deadly virus.

Last week, US President Donald Trump threatened new tariffs against China after claiming there was evidence linking COVID-19 to a top-security lab in the central Chinese city of Wuhan, where the pathogen first emerged late last year.

In January, Beijing agreed to import an additional $200 billion in US products over two years, above the levels purchased in 2017, marking a truce in a bruising trade war.

Source: AFP

The Executive Board of the International Monetary Fund (IMF) approved today a disbursement under the Rapid Credit Facility (RCF) equivalent to SDR 165.6 million (about US$ 226 million, 60 percent of quota) to help Cameroon meet the urgent balance of payments needs stemming from the COVID-19 pandemic. The outbreak of the COVID-19 pandemic and the terms of trade shocks from the sharp fall in oil prices are having a significant impact on Cameroon’s economy, leading to a historic fall of real GDP growth.

The authorities are taking several actions to contain the spread of the disease, boost health and social protection spending, and provide support to affected businesses and households. However, due to a significant deterioration of the macroeconomic outlook and weakening of fiscal situation, driven by the drop of revenue in combination with additional direct health and social expenditures, urgent external and fiscal financing needs have emerged. The IMF’s support will help to fill immediate external needs and preserve fiscal space for essential COVID-19-related health expenditure. It is also expected to help catalyze additional donor support.

Following the Executive Board’s discussion on Cameroon, Mr. Mitsuhiro Furusawa, Deputy Managing Director and Acting Chair, issued the following statement:

“Cameroon is facing serious challenges from the twin Covid-19 pandemic and terms of trade shocks. Weak global demand, depressed commodity prices, and domestic containment measures weigh on the outlook, and are causing significant adverse economic and social effects. The shocks have given rise to substantial fiscal pressures and an urgent balance of payments need.

“The authorities are taking decisive actions to limit the spread of the virus and its economic and social impact. They have implemented strong crisis containment and mitigation measures and are scaling up spending to bolster their health response. Additional measures currently under consideration will provide support to vulnerable households and firms.

“Given the sudden and pressing nature of the shocks, accommodative fiscal and monetary policies are warranted to mitigate the human and economic impact of the outbreak. However, the authorities remain committed to their reform agenda under the ECF arrangement. They plan to undertake adjustments to return to the fiscal consolidation path once the crisis abates to safeguard debt sustainability and ensure a strong recovery.

“IMF emergency financing under the RCF will support the government’s efforts to mitigate the impact of the twin shocks. Additional assistance from development partners will be critical to fill the remaining financing need. Strict budgetary controls and transparency will be needed to ensure that the assistance under the RCF meets its intended objectives.”

Culled from IMF

France said on Friday it was readying a “historic” package of multi-billion euro loans to help carmaker Renault and flag-carrier Air France through the crisis caused by the coronavirus.

For Air France, a seven billion euro ($7.5 billion) package is planned and for Renault five billion euro ($5.4 billion), Finance Minister Bruno Le Maire announced.

He said the package was needed to save Air France amid an unprecedented industry crisis but warned the money would come with strings attached, with the airline notably having to improve its environmental credentials.

For Air France, the loan package is made up of four billion euros in bank loans guaranteed by the state and a three billion euro loan direct from the state, he told TF1 television.

“We need to save our national company and the 350,000 direct and indirect employees affected,” he said, while describing the plan as “historic support”.

“We are behind Air France, behind the employees of Air France to guarantee our independence and save jobs,” he added, while denying that nationalisation was on the cards.

But he warned that the help was not a “blank cheque” and would come with “conditions” linked to its profitability but also environmental factors.

“Air France should become the most environmentally respectful airline in the planet. This is the most important condition for me.

“Air France needs to present a plan for reducing CO2 emissions and transforming its fleet to be less polluting,” he said.

In The Hague, Dutch Finance Minister Wopke Hoekstra announced the government plans to support KLM with an aid package worth between two to four billion euros.

“We are currently working out the exact form and details,” the finance minister said Friday.

‘Crisis will last years’

For Renault, a five billion euro ($5.4 billion) bank loan package guaranteed by the state is being worked on, Le Maire said.

“What is at stake here is our automobile industry. Renault is an industrial flagship that belongs to our culture and history,” he added.

The French state retains shareholdings in both Renault and Air France of 15 and 14.3 percent respectively.

Le Maire had previously warned that he expects GDP in France to contract 8 percent this year due to the effects of the lockdown against the coronavirus, which is due to last in France until May 11.

“This crisis is historic. It will last years. It will be long. It will be difficult. I want every businessperson to know that… the state will be beside them,” he added.

He said France would do everything “to save its companies and start again with an economy that is more respectful for the environment.”

Source: AFP