Prime Minister Shinzo Abe has said the government will launch a plan to provide zero-rate unsecured loans to small and medium-sized businesses plagued by the COVID-19 outbreak.
The state-owned Japan Finance Corp. is among the entities that will join the program to help small businesses access finance to help them stay afloat, Abe said at a meeting of a government task force on the coronavirus response on Saturday.
“We will do everything we can to keep jobs and make sure businesses can keep business going,” Abe said during the meeting at his office.
The government will also financially support parents who have been forced to take time off to care for their children due to Abe’s brutal decision to close all schools from last Monday to the start of the new school year in April.
These parents will receive money to make up for any shortfall in their income due to their leave, Abe said. The government will also fund childcare programs while schools are closed.
Abe asked Cabinet members at the task force meeting to step up work to compile a new emergency package on Tuesday. It will aim to mitigate the negative economic impact, strengthen support measures for parents with school-aged children and prevent the spread of the virus.
Abe said he hoped to use 270 billion yen ($ 2.6 billion) in a state reserve fund for the current fiscal year through March “as much as possible.” The initial envelope announced in mid-February amounted to 15.3 billion euros.
After being criticized for being slow to respond to the crisis, Abe decided to close schools and call for the cancellation and postponement of large-scale events to reduce the risk of group transmission. From Monday, Japan will restrict travel from China and South Korea.
Fears are growing that the Japanese economy will enter recession after contracting in the October-December quarter as the consumption tax hike dented private spending.
The total number of infections has exceeded 1,000 in Japan, including around 700 from the Diamond Princess cruise ship quarantined for two weeks in February in Yokohama. The death toll stands at 13.
Globally, the epidemic that began late last year in the central city of Wuhan in China has resulted in more than 100,000 infections.
Abe is seeking to enact special legislation, effective for two years, by next Friday, allowing him to declare a state of emergency if necessary.
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