FTSE 100 suffers worst week since 2008 amid coronavirus crisis – business live | Business

The leading German business daily, Handelsblatt, is reporting that Lufthansa, the nation’s flagship airline will apply to the German government’s multi-billion liquidity fund for help due to the financial fall-out from the coronavirus.
In an internal video message to Lufthansa employees, the CEO Carten Spohr said the company would look to the German government for help, as well as entering discussions with governments in the other countries where it has a subsidiary, about possible state aid.

A spokesman for the company, Europe’s largest-grossing airline which last week announced it would cut its flights by 50 per cent in response to the health crisis, confirmed the reports.
Spohr is due to participate in an emergency meeting with chancellor Angela Merkel and other industry bosses this evening at which the impact of the coronavirus on the German economy will be on the agenda. Thomas Jarzombek, the air industry coordinator in the government, has called representatives of the industry to a meeting this coming Monday, to discuss how to reduce the economic fallout. Jarzombek said the main aim was to work out what the air industry, just like other branches of industry, needed to get through the crisis. Jarzombek said: “The government is providing various instruments in order to help in cases of short term liquidity bottlenecks,” he said, citing various government lending programmes.

“If the need is there, they can be extended at short notice, be made more flexible or deployed in new ways.”

He said the main goal was to retain as many jobs as possible.

Germany has announced “unlimited” aid to see businesses through the coronavirus crisis, with a starter plan of half a trillion euros.

Finance minister Olaf Scholz said there was no upper limit to credit on offer from the state-owned KfW development bank.
The government unleashed €550bn (£492bn) in government backed loans, which economy minister Peter Altmaier said was “just for starters”.

He vowed that no healthy company would find itself in trouble:

“We will reload our weapons if necessary.”

The package is bigger than the €500bn aid offered during the 2008 financial crisis.

As of this morning, Germany had seen 2,369 cases and five deaths from coronavirus.

Germany’s export-led economy is vulnerable to the rapid slowdown in world demand that began in China. More than half German companies surveyed by the ifo Institut this week reported negative effects from the coronavirus.

Berlin, Bavaria and two other of Germany’s 16 states have announced the blanket closure of schools and kindergartens, with more expected to follow.

Deka Bank chief economist Ulrich Kater said Friday’s guarantee package is a “whatever it takes from the government”.

He said the measures to help particularly small and medium-sized companies through the crisis are “absolutely sensible”.

“This is just the news that can stop the downward spiral.”

(thanks to AFP and Reuters for the quotes)

Lloyds Banking Group has been forced to shut two of its offices this week, affecting nearly 2,000 staff, after discovering the first coronavirus cases across its workforce.
Around 450 staff at its Edinburgh Citymark building are currently being asked to self-isolate, work from home or work from an alternative emergency site after a colleague was diagnosed with the virus. That site, where some of its tech and digitally-focused staff are based, remains closed.
A Lloyds spokeswoman said:

“The Edinburgh Citymark building will be temporarily closed to allow for the appropriate areas of the site to be cleaned, after a colleague based there was diagnosed with COVID-19.

“Our priority is the wellbeing of the individual, as well as the colleagues and visitors to the building. We’re closely monitoring the developing situation and continue to follow official guidelines.”

Lloyds’ Belfast Gasworks office, where around 1,500 staff call centre staff are employed, was closed on Monday after a separate case was confirmed. That office was fully reopened on Thursday.

The head of the European commission Ursula von der Leyen has described the coronavirus as “a major shock” to Europe’s economies, as she promised a multi-billion euro fund to handle the fallout.

At a press conference in Brussels, von der Leyen said the coronavirus pandemic was an “unprecedented challenge for our healthcare systems”, but the EU could withstand the economic shock as long as member states “lived up to [their] responsibilities”.

She announced Brussels was increasing a coronavirus “investment initiative” to €37bn (£33bn), up from €25bn proposed on Tuesday. The starting point is €8bn of unspent money from the EU budget for infrastructure spending – “sleeping money” as von der Leyen put it – that is intended to trigger a further €29bn of public and private funds.

But EU member states and the European parliament – currently meeting in restricted sessions because of the virus – will have to approve the idea.

The commission also provided more details on measures announced earlier this week, such as loosening rules on state aid, and making use of flexibility in EU budget rules.

Measures include:

• Relaxing airport slot rules. Airlines will not lose their prized landing and take-off slots, if they fail to use them as a result of travel bans and falling demand. A waiver on the usual “use it or lose it” rule that requires carriers to use 80% of their slots, will run until 30 June 2020 and can be extended if necessary.
• Loosening rules on state aid, so governments can help companies by suspending tax payments or compensate those suffering losses. The commission said it had already signed off a Danish scheme in less than 24 hours, promising to do the same for other countries.
• Releasing €1bn from the EU budget, which is expected to cover €8bn in loan guarantees, with the aim of providing liquidity to 100,000 small and medium-sized companies.
• Governments will be able to use flexibilities in the EU stability and growth pact rules that restrict the deficit. In normal years a state’s deficit cannot exceed 3% of gross domestic product. This rule will be relaxed under an “unusual events” clause, so governments can, for example, pay self-employed people or help companies that have put workers on half time, without facing fines from Brussels

She also said France and Germany were “willing to adapt” export bans on medical goods, such as masks and ventilators. Such restrictions flout EU rules on the free movement of goods and have angered countries that do not produce such products.

Von der Leyen said the commission would do more if needed, delivering the message in the EU’s three working languages of English, French and German.

“This is an important economic package but we have to acknowledge the situation is evolving fast. We stand ready to do more as the situation evolves,” she said.

“We will do whatever is necessary to support the Europeans and the European economy.”

She also insisted EU authorities were fully behind Italy, following complaints from Italian politicians that Europe has gone missing in action when it comes to helping the country worst-affected by the coronavirus epidemic.

Although the stock market is surging, the City is eerily quiet.

Walking down Moorgate towards Bank of England there is a marked absence of pedestrians and cars. It feels like a Sunday, my colleague Larry Elliott reports.

Lloyd’s of London has closed its underwriting today, as part of a stress-test of its resilience for a coronavirus shutdown. Anecdotally, many City workers have said they’ve been testing home-working in recent days.