Measures for dealing with the COVID-19 economic crisis

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During the last few weeks, the eyes of the Macedonian and global community in general have been turned toward the development of the situation regarding the coronavirus. It is an epidemic, that, amoung other areas, has had devastating consequences on international economic relations. From the negative economic implications in every area (from the financial markets to the real sector), it may not be far from the truth to conclude that modern capitalism as a system, at least at its present level of development, has no sufficiently powerful internal mechanisms to deal with such shocks and crises. However, at the moment, we have to shift our focus from the economic ideologies to the measures we can take, and the suggestions we can heed, in order to soften the impact of the current crisis.

In Macedonia, the creators of the economic policies came up with solid measures designed to increase the overall liquidity of the economy. This would help the business community, but it is important that other sectors of the economy are not ignored in these trying times. It is, for example, quite obvious that the crisis has had a horrible impact on the tourism sector. Because of this, the idea to create a stabilisation fund is a good one, but it would be better to find ways to increase its financial capacity by integrating it into European - level fund.

Additionaly, depending on how long the crisis will last, the expenses of the tourist industry can be recompensed, to a degree, by stimulating the domestic tourist consumption. This, however, requires structural measures to stimulate the consumption and promote the model of weekend-tourism, perhaps via vouchers for the citizens.

It would also be wise to include the insurance industry in these stabilisation efforts, as a sector dedicated to dispersing risk.

Additionaly, efforts should be made to speed up the processes and mechanisms that channel the IPA funds, using them as fresh capital for the Macedonian economy.

As for the banking sector, despite the measures already taken, the government should think about others. Promoting the project financing model in order to increase the degree of financial inter mediation, and with it, stimulating the economic activity, would be one such measure.

In order to aid the agrarian sector, it would be very desirable to guarantee the sale of some of the farmers' stock of agrarian products.

 In order to implement all these measures, the government would need a great deal of money. Because of this, it would be invaluable to find ways to increase the public sector's savings.

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