26 November, 2022

The dilemma that Covid-19 generates: Save the economy or save lives?

photo VD: Carmen Rodriguez.
Hector Murcia, Spain

Covid-19 generated a global health crisis, but also, In parallel, it generated a large-scale economic crisis worldwide. Governments are now trying to resolve the dilemma between safeguarding health and the economy.

In the emergency, some countries had to decide between the total confinement of their inhabitants, paralyzing a good part of its economic activity; or take more relaxed steps, risking to register more contagions and deaths, by the disease, in order to try to keep its economy afloat.

After several weeks in quarantine, Spain, decided to reduce measures in order to save its economy.

The spanish government, chaired by the socialist Pedro Sánchez, authorized that, from Monday 13 of April, good part of the citizenship returned to their jobs, which supposes that some 4 millions of people circulate through the streets or use public transport.

According to Sánchez, the decision was clear for: “…Avoid the collapse and paralysis of our economy ", without neglecting the importance of "avoiding contagion" by Covid-19.

Different opinions

The measure generated discrepancies, even among government allies. Pablo Iglesias, Vice President of the Government and spokesperson for the United We Can Party, He stated on his Twitter account that: “…The president of the employers said: We already lose 100.000 million a month… The union secretary replied: Make 40 years that I am a trade unionist and have never asked for the closure of any factory, but now people's lives are at risk…”.

Meanwhile, Gabriel Rufián, spokesperson for the Esquerra Republicana de Cataluña party, he warned: "We must stop and it is not done, you have to stop all non-essential activities to have an activity that you can resume tomorrow; or we stop the country or there will be no country or flag to raise ".

Similarly, the presidents of the different Autonomous Communities of the country reacted. The President of Catalonia Quim Torra, called the new measure "reckless".

While, the president of the central government defends that the decision was made after listening to different positions, both employers and unions; but above all, that of the scientific committee that advises the Government on the pandemic.

"We rely solely on scientific criteria for decision making", said the official.

Although it is not clear whether the decision to reactivate certain non-essential activities, obeys criteria of the scientific committee, Sánchez affirmed: “The economic horizon ahead is black”.

Before the announcement of the measures, one of the members of the Government admitted that the scientists were not consulted.

Difficult economic path

Economic entities such as BBVA Research, confirm that the recovery of the Spanish economy will not be easy. In his recent study "The Macroeconomic Impact of Coronavirus and Stabilization Policies in Spain", determined that in a short confinement and a rapid recovery of economic activities, GDP would drop a 4,1%

While, of having a longer containment measure, the recovery would be gradual and the GDP would fall 7.9%.

The International Monetary Fund also ruled in this regard. The director of the Department of Europe, Poul Thomsen, explained that: “In the main economies of Europe, non-essential services closed by decree represent about a third of production. This means that every month, that these sectors are still closed, translates into a fall of the 3% in the annual Gross Domestic Product (Schedule)”.

While politicians and economists continue to debate the effects that Covid-19 will have on the economy, hundreds of people continue to add to the death statistics. Until this Thursday, Spain already has 19,130 deceased by coronavirus, 182,816 infected and 74,797 healed people.