French businesses are bracing for yet more turbulence after President Emmanuel Macron announced this week he was imposing 9pm curfews on nine cities, including Paris.
French leisure and tourism stocks, including hotels group Accor and Air France KLM, fell on Thursday after the new nighttime curbs.
With new Covid cases now at 20,000 per day and intensive care admissions at 200 (see graph below), it was time to “take back control” of the epidemic, Mr Macron said in a televised interview on Wednesday night, aping Boris Johnson’s Brexit slogan.
“The aim is to allow economic life to function, work, schools, universities are open and functioning,” he told 20m French viewers.
Cafes, bars, restaurants cinemas, theatres and other establishments welcoming the public would all have to shut between 9pm and 6am, he said, with the curfew expected to last at least six weeks.
The French hospitality sector instantly slammed the announcement as “a closure in disguise” for restaurants, cafes and hotels. “OK we receive help for furloughing employees, but what about holiday pay?” asked one Parisian restaurant owner, saying this accounted for 10pc of his costs.
Theatres, another hard-hit sector, were outraged. Bertrand Thamin, president of the national private theatres union, said: “There hasn’t been a single cluster in theatres. We’ve bent over backwards to respect health protocols and this is how we’re rewarded. We were asked to reopen and paid for productions and advertising and less than a month later, they shut venues down again. To govern is to look ahead. We’re heading for catastrophe.”
Mr Macron pledged to extend furloughing schemes and other support mechanisms to a wider number of sectors, beyond hospitality, tourism and sport.
The state will continue to pay for long-term furloughing in which employees agree to reduce work by up to 40pc, guaranteeing them 84pc of wages at least until next summer. The remainder is picked up by the employer.
Finance minister Bruno Le Maire said on Thursday that the country's solidarity fund would be "simplified and widened". "All businesses with less than 50 employees in curfew areas that have lost [at least] 50pc of their revenues compared to 2019 will be able to benefit from aid of up to €1,500 for the duration of the curfew period," he said.
He also said that state-guaranteed loans would be available for an additional six months, until 30 June, 2021. Funds of up to €10,000 (£8,983.80) per month are available. Businesses that receive them will see corporate social charges totally waived if they lose at least 50pc of revenues, he added.
Meanwhile French labour minister Elisabeth Borne said that businesses would now be asked to "set a minimum number of homeworking days per week for posts that allow it and to stagger arrival and departure times at work". French businesses have been deeply reluctant to push for home working, with only an estimated 15pc of employees staying away.
Curiously, the number of companies folding in France since January is the lowest in 30 years, according to data company Altarès, with 24,000 filing for bankruptcy so far this year.
In reality, many are “zombies” coasting for collapse, warned Thierry Milton of Altarès. “The hour of truth will come more in the first quarter of 2021, when businesses have to start repaying their state debts and an upsurge in business eats into cash.”
How are other countries compensating businesses during lockdowns?
Justin Huggler in Berlin
Germany has extended “Protective Shield”, its massive €1.1 trillion (£1 trillion) relief package for businesses, as they face up to the costs of the second wave (the economic impact of the first wave is captured in the graph below).
Bridging aid grants for SMEs and the self-employed have already been extended until the end of the year, with businesses able to claim up to €200,000 for the four months from September.
Peter Altmaier, the economy minister, is reportedly drafting plans to extend the programme until June 2021, with priority given to the hotel and catering and events industries. SMEs can also apply for fast-track loans of up to €800,000 from the German state development bank.
Big business has access to a fund of €400bn in government guarantees for loans and €100bn in capital injections. VAT has already been lowered from 19pc to 16pc until the end of the year, while the catering and restaurant industries have been switched to the lower rate of 7pc until June 2021.
Businesses and individuals can defer their taxes for 2020 and claim a refund on prepayments already made for 2019 and 2020. Late payment measures and surcharges have been waived.
Germany has extended its much-lauded Kurzarbeit furlough scheme until the end of 2021. Under the scheme, businesses can cut workers’ hours without placing them on full furlough, and the state pays them a fixed proportion of lost earnings for the reduced hours.
The scheme is usually only available for up to 12 months, but has been doubled to two years because of the crisis. The proportion of lost earnings made up by the state, usually 60pc, has been increased to 80pc, or 87pc for employees with children.
James Rothwell in Jerusalem
Israel is the only major country to impose a second nationwide lockdown and small businesses appear to be the main casualty of the restrictions, which have closed down non-essential shops and public-facing businesses.
The Israeli government says it has handed out 36bn shekels (£8bn) in financial support since September, when the daily infection rate soared to as many as 9,000 cases per day (see graph below).
This includes grants to cover expenses such as electricity and water bills as well as employment costs. Many businesses can also claim discounted rates on municipal taxes and agreements to postpone payments.
Half a million Israelis have been placed on furlough, though the unprecedented unemployment rate of 20pc during the first wave has fallen to 12pc, according to the Bank of Israel Research Department.
On a walk along Jaffa Street this week, one of the main retail hubs in Jerusalem, it was clear that many businesses are under pressure. At least a dozen had signs in the window or glued to their shutters announcing that their premises were available for rent.
Smaller businesses claim that the bureaucracy involved in securing government support is so cumbersome that it is not worth the effort.
One shoe shop owner in Tel Aviv recently dumped his stock onto the streets for people to collect for free, claiming that he had been bankrupted by the lockdown.
Sophia Yan in Beijing
As the country where coronavirus infections first emerged, China was also at the forefront of enacting policy support for businesses grappling with the devastating effects of shutdown.
Beijing took broad economic stimulus measures by lowering the amount banks had to keep on reserve and allowed preferential loans to be extended or renewed.
Local governments have also announced targeted measures to support small and medium-sized businesses, including extending tax deadlines, reducing rent, waiving administrative fees, and lowering lending rates.
Authorities have also cut social security fees that employers are required to pay on behalf of employees, and in some instances, also waived employee contributions.
This week, China’s stock market has reached a new record valuation as its rapid economic recovery from strict lockdowns has propelled shares higher (see graph below).
In Hubei province, whose capital is Wuhan – ground zero of the pandemic – small businesses that rented state-owned properties had rent waived entirely for a quarter, and reduced by 50pc for two quarters.
Companies in major cities that did not lay off employees are also able to apply for various credits and refunds.
The government, which controls electricity and utilities sectors, has extended payment deadlines and cut fees for services such as water, gas and electricity for companies and residents.
Taxpayers also have the option to apply to defer tax payments for up to three months.
Charles Anderson in Nelson
When New Zealand moved to Covid-19 Alert Level 4 for several weeks in March it meant that all “non-essential” businesses were to close. In doing this the Labour-led Government also announced a wage subsidy scheme for any sole trader or business expecting at least a 30pc decline in revenue.
Under the scheme, someone working more than 20 hours a week would get NZ$585 (£294) a week and those working under 20 hours would get $350 (£178) a week.
Versions of the subsidy were extended twice as the pandemic continued. In total the government has paid out more than $13.4bn (£6.8bn) in wage subsidies, to support more than 1.7m jobs.
Changes were also made to the law so commercial tenants had more time to pay their leases before being evicted – from 10 to 30 days. This included landlords having more time to pay their lenders before being defaulted – from 20 to 40 days.
The government also provided one-off loans of up to $100,000 (£51,000) to small businesses to support their cash flow. This was interest free if paid back within a year, and at 3pc interest after that.
It also set up a business finance guarantee scheme where businesses could access new loans or increase existing loans. The government took on the default risk of up to 80pc of the loan.
Cases of the virus are currently in single digits (see graph above). Unemployment has not yet blown out as many had predicted, with the official unemployment rate of 4pc actually falling in the most recent quarter.
However, the Treasury is predicting unemployment to reach 7.8pc in the next two years, representing more than 100,000 Kiwis losing their jobs. New Zealand’s GDP has also fallen by 12.2pc during the June 2020 quarter.
Net core Crown debt is also forecast to rise by $143.4bn between June 2019 and June 2024 to $201.1bn (£102.5bn).