A10| Wednesday, April 8, 2020 THE WALL STREET JOURNAL.
THE CORONAVIRUS PANDEMIC
ily to run the company. “If fac-
tory production doesn’t start
up next week, there are a lot of
companies that will go under.”
Employers’ association Con-
findustria says Italy’s economy
will shrink around 6% thisthing for a while because
health comes first, but if we
don’t open soon we risk losing
clients because our competi-
tors in other countries are still
working,” says Attilio Brivio,
the third generation of his fam-ChangeinItaly'sGDPfromfirstquarterofSources: Eurostat (reported); Confindustria (forecasts for 2020)0%2008 ’09 ’10 ’11 ’12 ’13 ’14 ’15 ’16 ’17 ’18 ’19 ’Alison Harding-Jones has
established a rule for her three
children to live by as she works
from a home office during a
national lockdown: “If you’re
making a cup of tea, you make
Mommy one and bring it in.”
Ms. Harding-Jones, Citi-
groupInc.’s head of mergers
and acquisitions for Europe,
Middle East and Africa, has
been holed up for 2½ weeks in
Aldworth, England, because of
the pandemic. The village is
about a 90-minute drive and
train journey from Citi’s Lon-
don offices and the flat she
uses during the workweek.
She has traded in-person
meetings with clients and col-
leagues for more time with
family and 12-hour days in a
home office previously used by
her husband, who accompanies
Ms. Harding-Jones as they so-
cially distance. Also present
are the children, four dogs and
six chickens, whose eggs are
shared with other villagers.
“It sounds like something
out of Dickens,” she said.
For 25 years Ms. Harding-
Jones typically has spent three
days each week on the road. In
her current role since 2017, she
routinely has jetted around the
region, advising corporate or
private-equity clients buying
companies or selling their own.
These days, it’s a challenge
just traveling around her own
house. One misstep, and she’llBYJULIESTEINBERGAs the new
coronavirus
forces big
changes in
how we
work, The Wall Street Jour-
nal is looking at how differ-
ent people are coping with
the stresses and risks. For
earlier articles in the series,
visit wsj.com/makingitwork.accidentally appear in her youn-
gest daughter’s TikTok videos.
The days of face-to-face
meetings have stopped and
the steady flow of M&A activ-
ity has slowed for now.
Such meetings are hard to
replace because they are essen-
tial to striking deals, reviewing
sensitive documents and pitch-
ing for new business. But con-
versations with clients con-
tinue, Ms. Harding-Jones said.
The pandemic, in a way, has
eased interaction, she said. “It’s
much easier to get hold of peo-
ple and have a real conversation
because everyone on a human
level is looking for interaction.”
Work on active deals has
slowed as companies assess
the impact of the crisis on their
businesses and performance.
Bankers are trying to under-
stand how the acute focus on
fighting the spread of infection
will affect regulatory approval
processes and the timing of
deals already announced.
There will be Covid-19-re-
lated adjustments in the fu-
ture to companies’ numbers,
she said, “but no one knows
what that looks like” yet.
Ms. Harding-Jones, who is
also vice chairman of the re-
gion’s corporate and invest-
ment bank, says she has been
surprised at how efficient she
can be without having to com-
mute. She is at her desk by
7:45 a.m., and is on calls with
clients and Citigroup col-
leagues until around 7:30 p.m.
She tries to take quick
breaks to walk the dogs and
has found time to bake, mak-
ing bread for the second time
ever, she said.
Ms. Harding-Jones says she
is surprised positively by some
of the changes. Still, she asks:
“Can we really keep doing this
for three, four, five, six,
weeks? I don’t think it’s neces-
sarily going to get easier.”Citigroup Executive
Leaves City Behind
ers are working.”
Most factories in Germany,
Italy’s main competitor for ex-
port markets in many indus-
trial sectors such as machine
tools, are still operating.
Italy’s bars and restaurants
were the first businesses to
shut down a month ago, and
will likely be the last to re-
open. But many owners worry
that if the restrictions con-
tinue for too long, they might
not be able to reopen at all.
Even businesses that
weren’t forced to shut down
are suffering. Among them are
wine producers, who before the
lockdown used to sell around
half of their production to bars
and restaurants. People are
drinking less at home than they
would if they went out, and
they are less willing to splurge
on expensive bottles. As the vi-
rus sweeps the world, wine ex-
ports to all regions are down.
“There are no precedents for
this, even if you go way back in
time,” says Ottavio Cagiano,
who heads Italy’s association of
wine producers, Federvini. So
many wine bottles are going
unsold that some winemakers
are considering using the alco-
hol to produce hand sanitizer
instead. Some producers of li-
queurs, such as Campari and
Ramazzotti, already are.
Italian agriculture is also
facing a shortage of seasonal
workers, most of whom nor-
mally come from Eastern Eu-
rope. More than 200,000 are
needed this year, according to
agricultural industry associa-
tion Coldiretti. Strawberries,
asparagus and radicchio are
due to be harvested now and
risk rotting in the fields. The
grape harvest starts in August
but nobody knows whether
the seasonal workforce will be
willing, or able, to come back
by the summer.95% of companies have fewer
than 10 employees. The econ-
omy still hasn’t fully recovered
from the aftermath of the fi-
nancial crisis. In recent years,
the profitability of Italian
businesses that survived the
crisis has improved, but it is
still 20% lower on average
than in 2007, according to rat-
ing agency Cerved.
To soften the blow from the
lockdown, Italy’s government
on Monday increased to €
billion ($810 billion) a program
of guarantees for bank loans
and liquidity that will be avail-
able to companies and house-
holds.
In March, the government
launched a €25 billion emer-
gency fiscal package, with
measures ranging from vouch-
ers to pay for babysitters to
subsidies of €600 for people
currently without an income.
More than three million people
have applied for that subsidy
so far. The government has
also introduced a moratorium
on some mortgages and other
loan repayments for families
and businesses, and is distrib-
uting emergency funds across
the country, including food
vouchers for families in need.
Companies say the immedi-
ate financial help is vital for
surviving the shutdown, but
they say what they really need
is to get back to work.
“If you are closed for three
weeks you can keep your cli-
ents, because they know these
are exceptional times. But
much longer than that and
they will look elsewhere,” said
Massimo Carboniero, whose
company makes machinery for
the automotive industry and
other sectors. “There should
have been a decision across
Europe to stop production for
a certain period. It’s not fair
for us to be closed while oth-year, provided the worst phase
of the coronavirus outbreak
has abated by May. The fore-
cast assumes the economy can
partially bounce back later
this year from a deep contrac-
tion in the second quarter.
Italy’s government is consid-
ering a gradual plan to reopen
the economy from mid-April
onward. After Easter, a limited
number of industrial sectors
could be allowed to resume
production, depending on how
the fight against the virus is go-
ing. But unwinding the lock-
down could take several weeks.
Service sectors such as restau-
rants and bars could face a long
wait until they can reopen. Con-
tinuing hygiene and social-dis-
tancing rules are likely to affect
all workplaces until there is an
effective vaccine or treatment.
Italy faces a particularly
grave economic risk from the
lockdown because of the prev-
alence of small and midsize
businesses, many of which are
family-owned and have limited
financial flexibility. In Italy,can then deploy to try to iso-
late the virus. The U.K. gov-
ernment is expected the re-
view the lockdown measures
by early next week.
Britain won’t be completely
bereft of leadership: The civil
service will likely play a key
role in helping the government
navigate the next few weeks.
There is also an established
body of scientists that has
largely crafted the govern-
ment’s response so far to the
coronavirus. However, it is un-
clear how a key decision-mak-
ing body, the C-19, will be run
during Mr. Johnson’s absence.
“It will be a severe test for
the cabinet’s discipline, as
there are growing signs of ten-
sion among ministers over
their next big challenge—an
exit strategy from the lock-
down,” said Mujtaba Rahman,
managing director at consult-
ing firm Eurasia Group.
Business surveys indicate
that the U.K. economy shrank in
March as the government im-
posed restrictions on movement
and social interaction. Surveys
of purchasing managers at Brit-
ish service providers and manu-
facturers indicated that activity
declined at the fastest pace
since records began in 1998,
and economists estimate output
may have been as much as 5%
lower than during February.and the British Department of
Health, which is concerned
about the virus quickly
spreading again. That pits Mr.
Sunak, the 39-year-old Trea-
sury chief and a rising Conser-
vative Party star, against Matt
Hancock, a former candidate
for party leader who runs the
Department of Health.“The public will be very an-
gry if there’s any sense that
ministers are moving for posi-
tions,” says David Lidington, a
former lawmaker who acted as
ex-Prime Minister Theresa
May’s de facto deputy.
“There’s an awareness of that
among members of the cabi-
net—that if they are seen to
put personal interest ahead of
the national interest, that will
be met with anger.”
A plan is being formulated
to ease the country out of
lockdown but it is still early.
The national epidemic has yet
to peak and Britain has yet to
acquire a large stock of tests itmeanwhile, now finds himself
in a role akin to chairman of
the board, albeit with no power
to remove or appoint ministers.
Decisions on issues such as na-
tional security will be made by
the cabinet as a whole, the
government said on Tuesday.
The queen, who is normally
briefed weekly by the prime
minister, will be updated by se-
nior Downing Street officials.
Should Mr. Johnson die, Mr.
Raab would take over the
reins as interim prime minis-
ter. If Mr. Raab became ill, the
mantle would pass to Treasury
chief Rishi Sunak.
Either way, there would then
be an accelerated contest to
find a new permanent leader
for the Conservative Party, who
would automatically become
prime minister given the party’s
large majority in Parliament.
Corralling the cabinet could
prove tricky. Less than nine
months ago, many cabinet
members were competing to
lead the Conservative Party.
Mr. Johnson won that contest
by a large margin, but several
of those who fell by the way-
side still see themselves as fu-
ture leaders.
An immediate challenge will
be reconciling differing views
between the Treasury, which
worries that the shutdown
could decimate the economy,LONDON—The U.K. govern-
ment sought to maintain a
united front in the face of a
near-unprecedented health cri-
sis while Prime Minister Boris
Johnson remained in intensive
care, suffering from severe
symptoms of the new corona-
virus.
Following his admission to
intensive care on Monday
night, Mr. Johnson is in a sta-
ble condition and breathing
without the help of a ventila-
tor, a government spokesman
said. The 55-year-old hasn’t
been diagnosed with pneumo-
nia, one of the symptoms of
Covid-19—the respiratory dis-
ease caused by the new coro-
navirus—but is receiving oxy-
gen, the spokesman added.
In a reminder of the further
challenges for the government,
cabinet minister Michael Gove,
one of Mr. Johnson’s closest
colleagues, said he was isolat-
ing himself after a member of
his family had suffered symp-
toms of the virus. He said he
had no symptoms himself and
was continuing to work.
The admission of Mr. John-
son into intensive care deliv-
ered a shock to the country,
fanning worries that his health
could further deteriorate and
he could face weeks of recuper-
ation. The situation risks leav-
ing the country rudderless at a
key time in the virus’s spread.
Britain’s informal code of
government doesn’t designate
a vice prime minister who au-
tomatically takes charge when
the leader is incapacitated. Mr.
Johnson has delegated duties
to Foreign Secretary Dominic
Raab. But it will be left to the
remaining 24-member cabinet
to unite behind the 46-year-
old interim leader.
Mr. Raab addressed the na-
tion on Tuesday, saying he was
confident Mr. Johnson would
recover. “If there is one thing
I know about the prime minis-
ter, he’s a fighter,” he said.
Unless Mr. Johnson makes a
very rapid recovery, cabinet
members will have to come to-
gether to make a momentous
decision: when to lift a gov-
ernment lockdown aimed at
halting the spread of Covid-19.
“The prime minister always
remains the prime minister,”
Mr. Gove said. But it is unclear
when and if he can return to
Downing Street. Mr. Raab,
BYMAXCOLCHESTER
ANDPAULHANNON
U.K. Government Shifts Gears
With prime minister in
intensive care, cabinet
steps in as challenges
from outbreak mount
Flowers arrived at 10 Downing Street Tuesday, a day after Boris Johnson was moved to intensive care.SIMON DAWSON/REUTERSItaly’s month-old lockdown is
slowing the coronavirus, but the
economy is gasping for breath.
Manufacturers in March had
their worst month since re-
cords began, and are warning
the government that they could
lose customers to German and
other foreign competitors un-
less factories reopen soon. Res-
taurants that have survived
world wars are in danger of
never opening again. Agricul-
ture needs to find at least
200,000 seasonal workers, who
normally come from abroad,
before fruit and vegetables
start rotting in the fields.
Italy’s economic pain shows
the sort of pressure that is
likely to mount on other West-
ern economies that are going
through similar lockdowns
lasting many weeks. Even af-
ter lockdowns end, weak de-
mand is expected to hold back
a rapid recovery.
The country is making prog-
ress in controlling its corona-
virus outbreak. The number of
people in intensive care has
declined in recent days, after
peaking late last week. Daily
deaths are trending down. But
there is still a long way to go
in suppressing new infections.
As a result, it isn’t clear when
the government will pull back
on measures that have cur-
tailed social interaction. Italy’s
lockdown is among the tough-
est in Western countries.
Plywood producer Brivio,
based in a town southwest of
Milan, has been caught up in
the forced closure of those
companies that aren’t consid-
ered essential. Production,
90% of which is exported and
the bulk going to Germany,
halted on March 25.
“It was right to close every-
BYERICSYLVERS
ANDMARGHERITASTANCATI
Italy’s Economy Staggers as Country Waits Out Crisis
A patient suffering from Covid-19 wears a snorkeling mask while being treated at a Turin hospital.MARCO BERTORELLO/AGENCE FRANCE-PRESSE/GETTY IMAGESThe civil service will
likely play a key
leadership role in
the next few weeks.Executive Alison Harding-Jones with her daughter, Lettie Fenton,
and two of the family’s four dogs at home in Aldworth, England.ALISON HARDING-JONES