Spain’s stock market lost 14 percent of its value on Friday, capping a record one-month fall of more than 30 percent.
The government has seized the authority to regulate the prices of medical products, is making 2.8 billion available to regional health authorities to fight the coronavirus outbreak, and is taking €1 billion from its contingency fund to help cover the costs.
The government also is giving self-employed persons and small and medium-size businesses a six-month tax holiday, valued at €14 billion.
Prime minister Pedro Sánchez, who has called an national emergency and essentially put the nation in lockdown, called on the country’s bickering parliament to pass a unity budget addressing the virus crisis and suggested that greater economy stimulus measures may be needed.
TREND FORECAST: As we forecast last September, when the ECB cut its main deposit rate by 10 basis points to -0.5 percent and began a new quantitative easing program of buying 20 billion euros per month of asset purchases, it would do next to nothing to boost economic growth. Indeed, last quarter 2019 Eurozone growth was 0.1 percent.
While there will be strong pushes by EU governments to increase stimulus, as nations have now begun following the coronavirus outbreak, considering the economic fallout from locked down economies and diving equity markets, neither stimulus or lower rates will boost growth.
Also, real estate values, which have spiked in major cities since 2008, will sharply fall.
