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Avoiding ‘free lunch’ corporate bailouts has become simple common sense

Many governments are now successfully using billion-dollar Covid-19 state aid packages to change private-sector behaviour — it is a wonder it is not more widespread

Avoiding ‘free lunch’ corporate bailouts has become simple common sense
Photo: Getty Images

The Covid-19 crisis and recession provides a unique opportunity to rethink the role of the state, particularly its relationship with business. The long-held assumption that government is a burden on the market economy has been debunked.

Rediscovering the state’s traditional role as an “investor of first resort” — rather than just as a lender of last resort — has become a precondition for effective policymaking in the post-Covid era.

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