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What are the government stimulus packages and what do they actually mean?

Where does this money actually go?  Most of the funds are actually in the form of tax breaks.  This is to make sure that when businesses are up and running again, they do not have to worry about paying their tax bills which are usually first on the list for companies to pay. This is helping to make sure that cash flows stay within the business to keep them going.  If this is not enough then there are grants or low-cost loans available to business.  Next is making sure that employers retain their staff, unemployment in itself is very costly as not only do benefits have to be paid but the Government loses income from taxes that employment gives them.  Securing wages of staff is a measure that I cannot ever remember being utilised but that is what some governments are doing – as seen by the UK measures of protecting 80% of employee’s income.

There are also many other imaginative measures that countries are employing to keep the economies going.  Australia are allowing people to access their pension funds early up to a maximum of $10,000 per person from their superannuations, USA taking equity stakes in some businesses and sending out cheques to low income families of up to $3,000.  In the UK many measures including a 3-month mortgage holiday.  Governments are having to be very creative to ensure the economy keeps running.

It might sound like a lot of cash is being pumped into the system, but it is vital as the consequences could be much more serious.  Keeping money in the pockets of people keeps the world going. The ability to keep business going by allowing spending to continue makes sure that businesses and farming continues.  It is unlikely a business would reopen once closed.  Also, the morale of the population is critical.  What all governments are desperate to avoid is a depression.  Some might say a recession is inevitable, but it is usually over a short time period, but a depression would last years and might see a countries economic standing in the world disintegrate.

The markets have had huge losses posted over the recent weeks.  As this is an unprecedented situation and the the future is somewhat unpredictable which is what the markets dislike and to some degree a worst-case scenario is included in market prices.  Already there are signs that some of the government interventions are having a positive effect.  There are some companies that will be lost and may go out of business, especially in the tourism/travel sector but the majority of other companies will benefit from their governments support.

Life may never be the same after this Crisis but companies and Governments that have put the correct measures in place to look after their people and business may flourish in the long term.

Other News

Brits Urged to Take Up German Citizenship

German crowdExpatriate Brits living in Germany have been advised to look into the possibility of becoming German citizens, as, amongst other things, naturalisation is likely to make the practicalities of Germany wealth management more straightforward.

Expat group British in Germany has said that British people living in the country should act quickly as it will likely be harder to achieve citizenship if the UK leaves the EU on March 29 2019 without a deal. In the event a deal is reached, Brits will have until 31 December 2020 to apply for dual citizenship, according to Germany’s foreign ministry.

Effectively, this means that if Brits want to be able to ensure dual citizenship, they must act quickly as a no deal scenario could mean they have to renounce their British citizenship if they wish to become German citizens. The sooner Brits attend the Ausländerbehörde (Foreigners’ Registration Office) for advice the better their chances of securing a favourable outcome.

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French QROPS can help protect from currency fluctuations

Given the financial and political situation in Britain and Europe right now it is likely that more and more British people will look to move their pensions out of Britain, with a QROPS in France possibly the most popular potential option.

Over recent weeks the value of Sterling has taken a significant plunge resulting in significant rises in living costs for those reliant on the currency for most or all of their spending needs.

Inevitably, this means that many have had to reconsider their wealth management and financial planning strategies. Against this backdrop it is easy to see why experts are predicting a spike in the numbers of people taking advantage of a .

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