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How should the EU mitigate the coronavirus economic downturn?

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One MEP has suggested corona bonds to mitigate the effects of the economic downturn
One MEP has suggested corona bonds to mitigate the effects of the economic downturn   -   Copyright  AP Photo/Francisco Seco
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Europe is preparing for an unprecedented economic downturn due to the coronavirus pandemic.

But with the situation changing day-by-day no-one is able to predict the effects on the EU job market.

The International Labour Organisation said last week the pandemic could cost up to 25 million jobs around the world.

They propose income support for businesses as well as international cooperation.

"We are seeing many governments, including many European governments pumping a lot of fiscal and monetary effort into keeping their economies moving, into maintaining jobs, into maintaining income, and this is all very good. But we know that the example of the 2008 crisis is very instructive," explains Guy Ryder, Director General, International Labour Organisation. "We know when governments act together rather one-by-one in their national settings, the impact of what is done is all that much greater. Of course independent workers and the self employed really do need assistance because they can not look to an employer to offer protection. "

The hardest hit sectors (tourism, leisure, hospitality, and airlines) are already laying people off.

Manufacturers and construction industries are waiting to make decisions on whether to keep on staff.

Meanwhile, some EU countries are offering help for freelancers, who are often not entitled to unemployment benefits.

In the European Parliament, the group of Socialists and Democrats is calling on the EU to introduce "corona bonds" - a common fund to fight the economic and social effects of the crisis.

"We have suggested to the Commission and to the Council together with the European Central Bank to issue a corona bond. Because we have learned from the 2008-9 crisis, that austerity measures are not the ones that we can use in a crisis like this," says Klára Dobrev, Hungarian opposition MEP. "Especially not now. So what we need now is more liquidity, more money and more possibility in order to keep the economy and keep the people alive."

The idea of the corona bonds will be also debated by EU and eurozone finance ministers, some of them already rejecting the idea saying loosening budgetary rules should be enough to tackle the crisis.