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The World Is at War

Western countries are finally waking up to the sheer scale of the COVID-19 crisis, and now must marshal a society-wide response. All countries should be following China in confronting the coronavirus directly with all available resources, and they should take a lesson from Germany in managing the economic fallout.

MUNICH – The fight against COVID-19 is a full-on war. China seems to have won the first battle. Hong Kong, Taiwan, Singapore, and Japan have also chalked up visible successes in mitigating the outbreak, no doubt owing to their experiences in dealing with the 2003 SARS epidemic. Europe and the United States, on the other hand, are only just awakening from their illusions of invulnerability. As a result, the epidemic is now raging across the West.

The hardest-hit Western country so far is Italy, which has particularly strong economic ties to China. Northern Italy is now the new Wuhan (the Chinese megacity where the coronavirus first emerged). With its health system overwhelmed, the Italian government has slammed on the brakes, shutting down the retail economy and quarantining the entire country. All shops except pharmacies and grocery stores are closed. People have been instructed to stay home and may enter public places only for necessary shopping or commuting to work. Many public and private debt obligations (such as housing rents and interest payments) have been suspended. Italy is attempting to slow down the economic clock until the coronavirus dies out.

Meanwhile, although Germany has had very few coronavirus deaths so far, the number of infections is now skyrocketing as quickly as anywhere else. In response to the crisis, the German government has introduced a short-time work allowance and granted generous credit assistance, guarantees, or tax deferrals for distressed companies. Public events across the country have been canceled. Schoolchildren have been told to stay home. And Austria, for its part, has long since closed its border with Italy. Austrian schools, universities, and most shops have also been closed. Initially, France  pursued a more relaxed approach, but it has now also shuttered its schools, restaurants, and shops, as has Spain.  Denmark, Poland, and the Czech Republic have closed their borders with Germany.