46 Europe The EconomistMarch 21st 2020
2 Nationally, the percentage increases
have also been dropping. But the latest fig-
ures showed an uptick, from 12.6% to
13.4%, as the virus spread out to other re-
gions north and south of Lombardy. The
absolute numbers, which are what matter
to the country’s regional health services,
keep rising alarmingly.
So far the south has had fewer than 5%
of cases. But tens of thousands of people
have fled from the north as the virus
spread. The worry is that some are asymp-
tomatic carriers and that the next few days
could see the tally of infections soar in the
Mezzogiorno, where people have been less
scrupulous in respecting the lockdown.
The extent and duration of the epidemic
will also determine its impact on a weak
economy. Francesco Daveri, who teaches
macroeconomics at Bocconi University in
Milan, says much depends on when the
country returns to normal. If it is in June,
he conjectures that the fall in gdpfor 2020
could be 2-3%—substantially less than the
5.5% fall in 2009 after the financial crisis.
That is a big “if”, though.
On March 16th Giuseppe Conte’s
government, a coalition of the centre-left
Democratic Party (pd) and the anti-estab-
lishment Five Star Movement (m 5 s), un-
veiled an emergency budget worth €25bn
($27bn). It includes €10bn of support for in-
comes and employment, such as a pay-
ment in March of €600 for non-salaried
workers and a two-month freeze on lay-
offs. Other measures include loan guaran-
tees and a moratorium on loan repayments
for small and medium-sized companies.
“But, almost certainly, a second raft of mea-
sures will be needed, targeted more selec-
tively at the sectors that have suffered
most,” says Mr Daveri.
The emergency budget marked the sec-
ond time Mr Conte had trumped his critics,
notably in the hard-right Northern League,
by providing more than they had demand-
ed (the first time was when he applied stiff-
er containment measures across the entire
country). As before, he waited to show it
was he, not they, who was in control. His
canny tactics are paying off: the most re-
cent poll found 62% of voters endorsed his
government’s handling of the epidemic.
One exception is the League’s leader,
Matteo Salvini. He has kept up a barrage of
criticism, despite evidence that Italians
want their politicians to mute their differ-
ences until the crisis is over. On March 16th
he was embarrassed by a photograph show-
ing him and his girlfriend strolling
through Rome, ignoring the government’s
insistence that people keep a metre apart
and possibly its requirement that they have
a valid reason for leaving home. Mr Salvini
said he was shopping for necessities. “This
is surely not his moment,” says Sofia Ven-
tura, a professor of political science at the
University of Bologna.Itislessobviousthatinthelongerterm
the epidemic will undermine the
nationalistpopulismofwhichMrSalviniis
Italy’s(andarguablyEurope’s)mostpromi-
nentchampion.True,it hassweptawaythe
disdainforexpertsthatisa corepopulist
trait.NeverhaveItaliansbeenkeenertolis-
tentotheirvirologistsandepidemiologists
ormorerespectfuloftheirhealthworkers.
Butcontemptforscienceismorecharac-
teristicofthem5s,andthecrisismayyet
lendcredibilitytotheLeague’scauses,in-
cludingitsantipathytoglobalisationand
its Euroscepticism. Already shocked by
theirneighbours’refusaltoallowtheex-
portofprotectiveequipment,Italianswere
appalledwhenonMarch12ththeEuropean
CentralBankgovernor,ChristineLagarde,
appearedtoruleoutstepstoprotectItaly
fromtheeffectsofadditionalborrowing,
though shelaterchanged tack,and the
bankintroduceda largenewbond-buying
schemeonMarch18th.
“WhenEuropehasbeeninneed,Italy
hasalwaysgiven,”MrSalvinirailedinone
ofhismanytweets.“Nowthatweareask-
ingforhelp,allthe[other]countriesare
startingtoclosetheirfrontiers.”Itisan
oversimplification,butonethatwillstrike
a chordwithmanyItalians. 7N
ext to theStreet of the Virgin of Dan-
gers, in the heart of Madrid, builders
have been finishing years of work on a big
new luxury hotel that was due to open in
May. Like almost everything else in Spain’s
economy, that plan is now up in the air.
Facing Europe’s worst outbreak of covid-19
after Italy’s, Spain’s government on March
14th imposed a state of emergency, locking
the country down for 15 days. Down the
road from the hotel the Puerta de Sol, a nor-
mally busy transport hub, is deserted. With
14,370 cases and 630 deaths by March 18th,
rising steeply each day, the shutdown is
likely to last at least a month. It is a test not
just of the patience of Spaniards but of their
inexperienced coalition government. After
a halting start, Pedro Sánchez, the Socialist
prime minister, at least seems to have the
country behind him.
In Spain’s decentralised democracy,
health care is run by regional governments,
and so in Catalonia and the Basque country
is policing. The novel coronavirus has tak-
en its strongest grip in Madrid, governed by
the conservative opposition People’s Party(pp). Ascasesrampeduplastweek Mr Sán-
chez was accused of being “behind events”
by Pablo Casado, the pp’s leader.
Acting unilaterally, the Madrid regional
government closed all educational estab-
lishments as well as day centres for old
people; the Basque government closed
some schools; and Catalonia isolated
70,000 people around the town of Igua-
lada. The opposition criticised Mr Sánchez
and Podemos, his far-left coalition ally, for
allowing a big feminist march to go ahead
on March 8th. Several of those who took
part, including the partners of both Mr Sán-
chez and Pablo Iglesias, Podemos’s leader,
later tested positive for the virus (as have
other politicians from the right).
The government at last got a grip on
March 14th when, after a seven-hour cabi-
net meeting, it issued its emergency de-
cree. The delays reflected disagreement be-
tween the economic team, which favoured
caution, and those who favoured lockdown
and sweeping compensation.
The decree puts the national govern-
ment in charge of health care and policing.
It prompted grumbling from Quim Torra,
the separatist head of the Catalan adminis-
tration and to a lesser extent from his
Basque nationalist counterpart. Mr Sán-
chez insists that the virus is no respecter of
ideology or place. Most of the opposition
has swung behind him. That may make it
easier for him to get a budget through Con-
gress. He needs it: despite public debt of
96% of gdp, the government announced a
big, and welcome, package to help laid-off
workers and struggling businesses.
So far Spaniards seem to be rallying
round. Each evening at 8pm residents
stand on balconies to applaud harried
health workers. Patience may flag. But for
now, the virus has revived the nation-state
after years of centrifugal pressure. 7MADRID
The virus strikes a blow for national
unity in a divided countrySpainSánchez’s big test
The prime minister of all Spain