The Geneva Motor Show was cancelled Friday because of coronavirus fears, dealing a fresh blow to an industry already crippled by the outbreak in China.
Baselworld, one of the world’s largest watch fairs, was also called off after the Swiss government announced a ban on public and private gatherings involving more than 1,000 people. The measure, valid through March 15, takes effect immediately.
The Geneva show, which was set to begin next week, is one of the industry’s biggest—and glitziest—events, attracting about 600,000 car lovers over 10 days. Many top companies converge on the Swiss city to show off their newest models.
Maurice Turrettini, chairman of the foundation board for the show, called the cancellation “a tremendous loss for the manufacturers who have invested massively in their presence in Geneva.’’
“The financial consequences for all those involved in the event are significant and will need to be assessed over the coming weeks,” he said.
People who bought tickets in advance will be refunded, he said.
Baselworld, carnival also scrapped
Technically the ban doesn’t apply to Baselworld, as it was slated to start on April 30. But MCH Group said it preferred to push off the event until next January rather than prepare for an event that may still be called off.
The ban also means the world-famous carnival in Basel won’t take place next week.
The news came as no surprise. Presenters have been pulling out of the motor show in recent weeks as the virus spread beyond China. General Motors withdrew early on, followed by Ford, Jaguar, Mitsubishi, Nissan, Subaru and others.
Still, some 150 exhibitors were due to attend, and for the first time an indoor circuit was created to showcase electric cars.
Switzerland recorded its first cases of coronavirus this week. So far 15 people have been diagnosed with the virus. Globally more than 83,000 people have been infected, and more than 2,800 have died. In Europe, Italy has been hardest hit, with more than 600 cases and 17 deaths.
The outbreak, which forced automakers and their suppliers to suspend operations in China for much of this month, comes at a tough time for the industry. Companies were already struggling with slowing sales, falling profit margins and new emission regulations requiring heavy investment in electric cars.
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Why you can’t trust coronavirus counts
At least 613 people have tested positive for coronavirus in Switzerland, but that number isn’t a reliable measure of the outbreak. The Swiss government is abandoning efforts to keep a precise count of coronavirus cases to focus instead on easing the burden on the healthcare system and protecting the most vulnerable—the elderly and those with preexisting conditions. “The government has decided that they will only test people who are at risk, who have strong symptoms,” said Michael Hengartner, president of the ETH Board. “Young people, who might have weak symptoms, will simply be asked to stay at home to minimize contagion.” The Cantonal Hospital of Lucerne has received a recommendation from the government to limit testing to the most vulnerable or severe cases, said spokesman Markus von Rotz. “Only patients who are hospitalized and health care staff will be tested for coronavirus,” said Claude Kaufmann, a spokesman for Hirslanden Private Hospital Group, which operates 17 hospitals. “Patients with fever and cough must stay at home so that they do not infect anyone.” The Swiss Federal Office of Public Health confirmed that the cases could be far higher than reported and that “people at especially high risk are tested as a priority.“ No test, no infection This raises the question of whether the count reflects the true scale of the outbreak. Many people have been keeping tabs on the daily tally from the federal health office, relying on it to provide a measure of the severity of the situation in Switzerland. The country reported its third coronavirus death Tuesday as the outbreak worsens in neighboring Italy, which has logged over 9,000 infections and 460 deaths. It also marks a change in strategy from the early days of the outbreak, when the government ramped up testing following the first confirmed case on Feb. 25. Back then, even mild cases were being counted and traced in the effort to contain the crisis. The Swiss Federal Council said Friday that tracing the infection would continue “as long as possible.” At the same time, it indicated that protecting people by minimizing contact—at work or social events—was now the bigger priority. Large events have been banned across the country but, unlike in Italy, no blanket travel restrictions have been imposed. And the Swiss border remains open to commuters from Italy. “With the infection rate that this virus has, it will basically cross across the human population,” Hengartner said. “It will become a pandemic. And the challenge for governments is to keep the infection rate low enough that we can always manage the patients that need to get hospitalized.”
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COVID-19 may tip world into financial crisis, UN warns
The world is vulnerable to a financial crisis if the coronavirus epidemic drags on because it is already so deep in debt, the United Nation’s trade body warned in a report on Monday. An enduring health emergency will likely trigger margin calls, tighten borrowing conditions, and increase the risk of a stampede to sell assets not hit in the first round of market turmoil, the UN Conference on Trade and Development said. “This raises the prospect of a credit crunch in a period of high indebtedness,” despite very low interest rates, the report says. Hopes of a recovery will hinge on sustained and coordinated liquidity injections by central banks, more active fiscal policies, and renewed efforts to bolster trade. “Central banks should do whatever it takes in the face of the COVID-19, including directing credit for production and employment,” UNCTAD said. The world has been on a borrowing binge since the 2008 meltdown, when central banks pumped vast sums into cash-strapped markets and banks to shore up the system. At the start of 2020, total debt stocks exceeded more than $250 trillion, about three times global gross domestic product, according to the Institute of International Finance. Developing countries most at risk Developing countries are particularly vulnerable to a credit crunch, as many are already struggling with the highest debt levels on record. “For many developing countries that are facing debt distress already, I think we’re going to have to look at more radical solutions,” Richard Kozul-Wright, who oversees globalization and development strategies at UNCTAD, said in an interview Monday with CNNMoney’s Kasmira Jefford. “The need for a moratorium on debt servicing in some countries will also be necessary.” Economists have warned for years that such massive debt is a risk for the global economy. Record-low interest rates in countries around the globe have made it easier and cheaper for corporates, individuals, and governments to borrow. Last week, the U.S. Federal Reserve, which cut rates three times last year, slashed them by half a percentage point in response to the economic threat from COVID-19. The European Central Bank meets this week, and markets are pricing in a much smaller cut, given that rates are already in negative territory. There is also speculation that the ECB is preparing measures to provide liquidity to businesses hit by the outbreak.
