The COVID-19 pandemic and other economic crises have prompted governments around the world to implement stimulus measures to support their economies, individuals, and businesses. While the U.S. government’s approach has garnered significant attention, it is far from the only country to launch relief programs during times of crisis. Each nation’s response to economic downturns and public health emergencies is shaped by its political systems, economic structure, and available resources.

In this article, we will compare the U stimulus response with that of other major economies, examining the different strategies and policies employed to provide economic relief.

1. The U.S. Stimulus Approach: A Series of Measures

The United States' approach to stimulus packages has been varied and complex, with multiple relief packages passed by Congress during the COVID-19 pandemic. These included direct financial aid to individuals and families, unemployment benefits, small business loans, and health-related funding.

Key U.S. Measures:

  • Stimulus Checks: The U.S. government issued direct payments to individuals under several relief packages, such as the Coronavirus Aid, Relief, and Economic Security (CARES) Act and the American Rescue Plan (ARP). These checks were designed to provide immediate financial relief to individuals and families who faced economic hardship.

  • Unemployment Benefits: Additional federal unemployment benefits were temporarily boosted, and new programs were introduced to cover gig workers and the self-employed, who were often excluded from traditional unemployment insurance.

  • Small Business Relief: The Paycheck Protection Program (PPP) was established to provide forgivable loans to small businesses, enabling them to retain employees during periods of economic uncertainty.

  • Federal Reserve Actions: The Federal Reserve played a key role in stabilizing the economy by cutting interest rates and purchasing government securities, helping to ensure liquidity in the financial system.

Despite the swift response, the U.S. faced challenges in the implementation of these measures, including delays in disbursing funds, the complexity of eligibility criteria, and issues with the distribution of small business loans.

2. The European Union: A Coordinated, Diverse Response

In contrast to the U.S., the European Union (EU) takes a more coordinated, multi-country approach to stimulus measures, with each member state having its own policies. However, the EU itself also launched significant relief programs that aimed to support both individuals and businesses across member states.

Key EU Measures:

  • NextGenerationEU Fund: The EU's largest recovery effort, totaling €750 billion, was designed to help member states recover from the economic fallout of the pandemic. This fund provided grants and loans to national governments, with a focus on green and digital transitions.

  • Short-Time Work Schemes: Countries like Germany introduced “Kurzarbeit,” a program designed to prevent mass layoffs by temporarily reducing working hours and compensating workers for lost wages. Other EU countries, such as France and Italy, implemented similar measures.

  • Unemployment Support: In addition to short-term work schemes, many European countries boosted unemployment benefits during the pandemic, and some introduced targeted programs for sectors hit hardest by the crisis, such as hospitality and tourism.

  • Direct Payments: Some European countries, such as Spain and the UK, introduced direct cash payments to individuals who were most affected by the pandemic. The UK’s furlough scheme, which allowed employees to receive government-funded wages, became a model for other European nations.

The EU’s approach, which emphasized solidarity among member states, has been largely successful, though challenges remain in ensuring that funds are distributed efficiently and that countries with weaker economies benefit as much as those with stronger ones.

3. Canada: A Generous and Direct Response

Canada’s response to the pandemic has been widely regarded as one of the most comprehensive and generous among advanced economies. The Canadian government implemented several stimulus measures to support individuals, businesses, and healthcare providers.

Key Canadian Measures:

  • Canada Emergency Response Benefit (CERB): This direct payment program provided CAD 2,000 per month to individuals who lost their jobs or faced a reduction in work hours due to COVID-19. The CERB helped millions of Canadians make ends meet during the early stages of the pandemic.

  • Wage Subsidy Program: The Canada Emergency Wage Subsidy (CEWS) provided direct subsidies to businesses to help them retain employees during the pandemic, similar to the U.S. PPP program.

  • Provincial Support: Each Canadian province also introduced its own programs, such as income support and housing assistance, further extending the safety net for those affected by the economic downturn.

  • Support for Businesses: Canada also rolled out low-interest loans and grants to small and medium-sized businesses, ensuring that companies had the liquidity needed to survive during lockdowns and other restrictions.

Canada's response was characterized by a fast, well-coordinated rollout of financial aid, which helped maintain a high level of public trust in the government's pandemic response. Despite its initial success, however, concerns have been raised about how the country will manage the fiscal burden of these relief measures in the long term.

4. Australia: A Flexible, Dynamic Approach

Australia’s response to the pandemic involved a combination of direct payments, wage subsidies, and flexible support measures. The country focused on ensuring that both individuals and businesses had the resources needed to survive extended lockdowns.

Key Australian Measures:

  • JobKeeper Payment: Similar to Canada’s wage subsidy program, JobKeeper provided employers with a subsidy to help them retain employees during periods of reduced activity. It was one of the most widely praised aspects of Australia’s response.

  • JobSeeker Payment: This program was designed to provide income support to individuals who lost their jobs. It temporarily boosted unemployment payments to ensure that Australians had enough to live on during the pandemic.

  • Direct Payments: Australians received direct one-off payments of AUD 750 to support low and middle-income earners.

  • Business Loan Programs: The government introduced loan schemes with a government-backed guarantee to ensure that businesses, particularly small ones, had access to affordable credit during the crisis.

Australia’s relief efforts were praised for their adaptability and responsiveness to the changing economic landscape, though concerns were raised about how long the JobKeeper and JobSeeker payments could be sustained.

5. Japan: Focus on Business and Economic Stability

Japan’s stimulus efforts were more focused on ensuring economic stability, particularly for businesses, as the country faced a unique set of challenges during the pandemic. The government rolled out various initiatives to support both workers and businesses, but direct payments to individuals were less extensive compared to other countries.

Key Japanese Measures:

  • Business Loans and Subsidies: Japan introduced a range of subsidies and loans for businesses, including a special program to support small businesses facing financial difficulties.

  • Direct Payments: Japan provided one-time cash payments of ¥100,000 to individuals, with a focus on low-income groups.

  • Support for the Elderly: Recognizing the challenges posed by Japan’s aging population, the government allocated funds to help elderly citizens with medical and living expenses during the crisis.

While Japan’s approach was considered more conservative than that of some other nations, it focused on maintaining social stability and supporting businesses to prevent widespread job losses.

6. The United Kingdom: Swift Action with a Focus on Workers

The UK’s response to the pandemic mirrored many other European nations but was especially notable for its swift rollout of a worker-focused relief plan.

Key UK Measures:

  • Furlough Scheme: The UK’s furlough scheme allowed businesses to receive a government subsidy for employees who were temporarily laid off or unable to work due to the pandemic. The scheme provided workers with up to 80% of their wages, preventing mass unemployment during lockdowns.

  • Self-Employed Income Support Scheme: A similar program to the furlough scheme was created for self-employed individuals, who were often left out of traditional unemployment benefits.

  • Universal Credit Boost: The UK temporarily boosted Universal Credit payments for low-income families, providing additional support to those facing financial hardship.

The UK’s emphasis on protecting workers and maintaining employment helped prevent a surge in poverty, though questions have been raised about the sustainability of the government’s ongoing support.

Conclusion: A Diverse Global Response

While the U.S. government’s stimulus efforts were large and multifaceted, other countries also implemented significant relief packages to support their citizens and economies. The key differences lie in the scope, distribution methods, and areas of focus. Some nations, like Canada and Australia, focused heavily on direct payments and wage subsidies, while others, such as Japan and the EU, emphasized supporting businesses and ensuring economic stability.

Ultimately, the most successful stimulus efforts share common features: speed, inclusivity, and adaptability to changing economic conditions. The global response to the COVID-19 crisis has demonstrated the critical role that government relief packages can play in stabilizing economies, but it also highlights the challenges countries face in balancing short-term relief with long-term economic stability.

As the world continues to navigate the aftermath of the pandemic, the lessons learned from these diverse approaches will help inform future economic relief efforts worldwide.