COVID19 and the lowered crude oil prices

Capitol Hill Rome

Rome [ENA] After the unsuccessful OPEC summit in Vienna on last Thursday and Friday, Saudi Arabia has lowered crude oil prices by nearly 10%. The measure, proposed following the drop in Chinese demand due to the coronavirus epidemic, had been strongly opposed by Russia. The effects of the Saudi decision have already been felt and on Sunday the oil price plummeted by about $ 11 a barrel (-25%), the worst figure since 1991.

Following the rapid spread of the coronavirus and the lowered crude oil prices, the Milan bourse plunged 10.8% today as a wave of panic selling hit Europe. Today can be remembered as a ”European Black Monday ”. Stock exchanges across Europe recorded significant losses when have been opened this morning. While the Financial Times Stock Exchange 100 (FTSE 100), the index of the 100 most capitalized companies on the London Stock Exchange, fell by 8%, France and Germany lost more than 7% and Norway, a major exporter of oil, more than 12%. In Italy the bond spread soared 38 points from Friday's close of 178 to trade at 216 basis points. Many Milan stocks including the big banks and FCA failed to register a price.

On the other hand, the OECD declared that 14% of the Italian population live in relative income poverty. It said 27% would be at risk of falling into poverty if they had to forgo 3 months of their income. The emergence of Covid-19 coronavirus in January 2020 and its rapid spread in China and the rest of the world are further weakening the prospects for economic growth with a foreseeable damaging impact also on the labor market. It is only a hint, for the moment, but it hints at how much the damage of coronavirus will be felt on a job market that was already giving -between the end of 2019 and the first months of this year - signs of slowing down.The leaders of the opposition parties and the League leader Matteo Salvini are expected

to meet with the Italian premier Giuseppe Conte tomorrow in Rome. The government is imagining the possibility of appointing a technician in orderto face the #COVID19 emergency with a collaborative spirit. At the Headquarters of the government, Palazzo Chigi, where the warning remains very high, other restrictive measures are studied to contain the infections and the government is thinking to strengthen the team. There is reason to consider the appointment of a "super-commissioner" who will allow the executive to speak with one voice and who will assume the management of funds, purchases for healthcare facilities and any requisitions of real estate for the coronavirus emergency.