The US Earmarks €3.3 Tr To Fight The Effects Of The Pandemic; The EU Has Not Yet Disbursed Even €750 Bn

How a government shutdown affects the economy

Pablo Pardo (Washington) | What if it turns out that we are going to come out of the Covid-19 recession too quickly? In Europe that sounds like a joke, of course, thanks to the disaster organised by the European Commission with the purchase of the vaccines. In addition, there is the northern EU countries’ insistence that no funds should be earmarked for the revival of the lazy southern ones. (As ‘Bild’, Germany’s most widely read newspaper, already wrote in 2010, “Greece, but also Spain and Portugal, have to understand that hard work – which means ironclad savings – comes before the siesta”). But that is not the case in the United States. Across the Atlantic Ocean, the vaccine campaign is going much faster, and the public authorities have not been shy about spending to stimulate the economy.

The results are evident. As of today, about one in eight Americans is fully vaccinated, that is, they have received their two shots. President Joe Biden expects that within two months all citizens who so desire will have access to vaccines. In turn, the number of Americans who are willing to be vaccinated has grown from 60% to 69%. This suggests that the country will reach “herd immunity” – which occurs when around 70% of the population is vaccinated – in July.

Added to this is the enormous public spending launched to combat the recession caused by Covid-19. With the stimulus package approved last week, Washington has already earmarked 4 million dollars (approximately 3.3 billion euros) between spending increases and tax cuts to immediately combat the economic effects of the coronavirus. The includes up to a maximum of 3,200 dollars (2,690 euros) per person, and direct transfers of up to 300 dollars (252 euros) per child under 6 years of age. To a large extent, this is a trial of a universal minimum income that could, moreover, be made permanent, or quasi-permanent (i.e., renewed every year) in the case of aid to families with children. If we compare this figure with the EU’s 750 billion euros that have not yet been disbursed, the difference in the response to the pandemic of the two great economic blocs of the West is enormous, and not very favorable to the EU.

About the Author

Pablo Pardo
Pablo Pardo is Washington DC correspondent of El Mundo. Journalist especialized in International Economics and Politics.