Coronavirus expected to affect economy, Scicluna says

The Maltese economy is set to be affected by the coronavirus outbreak even if the disease does not spread to Malta, Finance Minister Edward Scicluna said this afternoon.

Earlier today, the Eurogroup – the finance ministers of the Eurozone – held an extraordinary meeting via teleconference to discuss the expected economic impact of the outbreak, and the measures that could be taken against it. Given the topic, finance ministers from non-Eurozone member states also joined the call.

Scicluna referred to this meeting in today’s parliamentary sitting, where he noted that it was evident that supply chains had already been affected, particularly since many imports came from China. He said that logically, the sectors which would first feel the hit were transport and tourism, with retail being affected as a direct consequence of this.

The Eurozone’s finance ministers, Scicluna said, were ready to use monetary and fiscal instruments to address any economic impacts. However, he warned, the use of monetary instruments was limited, since “we’ve used all of our bullets on the 2008 crisis.”

EU finance ministers ready to support fiscal measures

In a statement issued after the conference, Eurogroup president and Portuguese Finance Minister Mário Centeno noted that at this point, the extent and duration of the outbreak’s impact still needed to be ascertained. However, he assured that no efforts would be spared to contain the outbreak.

Centeno insisted that the EU was ready to take further policy measures, including fiscal measures “as they may be needed to support growth.”

EU regulations allow for flexibility to cater for “unusual events outside the control of government,” with Centeno noting that it is up to the European Commission to implement these rules and assess requests for flexibility from member states.

The finance ministers are set to meet later this month, with Centeno pledging that they will reassess the situation and discuss any further steps which may be required.