The government here is getting some things right:

1. Early decision to close schools, colleges, mass gatherings, and encourage remote working
   
2. Social distancing, contingency plans to increase HSE capacity, hiring more healthcare staff
   
3. €3.1 Billion emergency package for self-isolation sick pay, healthcare, support for SMEs etc.
   
4. Good communications to encourage voluntary compliance backed up later by legislative provisions if required.
   
5. Not relying on "herd immunity" to halt the outbreak - which implies tolerating c. 85,000 premature deaths. The longer we can delay infection peak, the greater chance that a) health services can provide better care, b) summer weather may reduce viral life, c) vaccine created resulting in a much lower death/misery count.
   

Where it is doing less well is with the speed and scale of the required response - the suspicion is that it will be slow and bureaucratic. What is needed now is:

1. Tax and loan repayment holidays for SMEs (without interest penalties)
   
2. Mortgage holidays and rent freezes, reduced utility charges
   
3. Cheap credit for distressed businesses
   
4. Health/temperature screening of incoming passengers
   

All this is possible because we have budget surpluses and the government can borrow at near zero interest rates - far cheaper than individuals or SME's can. The cost of failed businesses is far greater than the cost of tiding them over.

"Helicopter money" is an option, but a more targeted approach to people effected most by covid-19 and others who need it most will probably be more effective and have greater public support. Also it seems the ECB/Lagarde/Germans will probably block helicopter money. Where is Draghi when you need him? Time for Philip Lane (ECB Head Economist) to step up.

Index of Frank's Diaries