CEMAC zone: recession could reach 6% according to BEAC

All the indicators are certainly not red. But most of the economic indicators in the six countries of the Economic and Monetary Community of Central Africa (CEMAC) are already found the Monetary Policy Committee (CPM) of the Bank of Central African States (BEAC) at the end of the second annual session on June 24, 2020 in Yaoundé.

Analyzing the situation in Central Africa, it emerges that in the short and medium terms, the CEMAC zone is affected by the health crisis and the fall in the prices of the main export products. "

"In the first half of 2020, the revival of productive activities was slowed down in the sub-region by the disruption of supply circuits for imported products as well as by the restrictive measures adopted by the various governments to contain the effects of the pandemic. Although it is premature for the moment to fully grasp the impact of COVID-19 on national economies, it is already anticipated during this first semester a drop in production as well as a det…

Brussels approves exceptional spending by Italy against coronavirus

The Commission will keep in mind the exceptional circumstances when judging the budgets and deficits of the Member States, announces the European Union. In extraordinary situations, extraordinary measures. On Saturday March 7, Rome published a letter from the European Commission in which the Union authorities express their "full support" to Italy, facing the epidemic of coronavirus. The authors of the missive also explain that the exceptional expenditure "decided in response to the epidemic" will not be taken into account by Brussels in order to determine if a country like Italy respects its budgetary commitments vis-à-vis the Union.
Brussels approves exceptional spending by Italy against coronavirus

While Rome initially planned a 3.6 billion euro plan to fight the epidemic, the total amount has been increased in recent hours. Friday, the Italian Minister of Finance, Roberto Gualtieri, sent a letter to Brussels justifying his choice to mobilize 7.5 billion euros to deal with the coronavirus. A decision explained both by the need to increase the means of the authorities to fight the disease, but also by the need to support the economy, and in particular the most affected sectors such as "transport, accommodation, services tourism, entertainment, cultural activities and business events ”.

However, these measures will come at a cost: Rome expects its deficit, forecast at 2.2% of GDP in 2020, to drop to “2.5%” for the year. The government therefore had to obtain approval from Brussels to validate its plan. "The EU should respond to this emergency by using the integrated flexibility of the Stability and Growth Pact and by preparing a coordinated fiscal stimulus plan," argued the Italian finance minister. "We are not jumping into a vacuum," insisted the head of government, Giuseppe Conte. He also promised to quickly bring the deficit down to 1.8% in 2021 and 1.4% in 2022.

The European Commissioner for Economic and Monetary Affairs, Paolo Gentiloni, responded in a letter published Saturday to the Italian request, stating that "any exceptional expenditure decided in response to the epidemic would, by definition, be excluded from the calculation". In addition, "our framework of budgetary rules offers the flexibility necessary to respond to unusual events beyond the government's control," writes the European representative, adding that the Commission will have in mind the exceptional context when evaluating state budgets. members.

In other words, Brussels will not take into account these costs, considered as “one-off”, or exceptional expenses, to estimate if Italy respects its structural budgetary commitments vis-à-vis the European Union. On Twitter, Commissioner Gentiloni also expressed his "support and solidarity for Italian citizens and government initiatives" in the face of the disease. 

Rome will therefore be able to continue its mobilization against the epidemic. This decision was expected: earlier this week, Paolo Gentiloni had estimated that the Italian device - at the time estimated at 3.6 billion euros - was "proportionate". The representative added that the Boot's proposal would be studied "in a spirit of solidarity and understanding", recalling that the current crisis was an "unusual event", requiring an appropriate response. The EU is also ready to deploy "all the political options available if and when necessary to protect our growth against these downside risks," he said.