By Kirsti Knolle

VIENNA (Reuters) – Austria’s government said it will allocate 2 billion euros for loan guarantees on top of a 4-billion-euro aid fund to buffer the economy from the damage of coronavirus, as the number of confirmed cases in the country rose to 1,018.

The Alpine republic, which has reported two deaths from the global pandemic, announced major restrictions on movement in public places on Sunday, banning gatherings of more than five people and urging Austrians to self-isolate. Schools and shops that sell non-essential goods are closed.

The foreign ministry is working with airlines and travel agencies to bring Austrians back home, a spokeswoman told news agency APA, before flight services to and from the country are halted, a plan announced on Sunday.

Lufthansa’s Austrian unit AUA said it would suspend all flights from Wednesday night until March 28, and Ryanair’s Laudamotion cancelled all flights until April 9.

Austria has closed its borders to most arrivals from neighbouring Italy and Switzerland. People travelling from Britain, the Netherlands, Russia and Ukraine can gain entry only if they agree to be placed in two weeks of home quarantine or can produce a current health certificate.

Austria still has no restrictions in place along its border with Germany, the interior ministry said, although its northern neighbour introduced its own border controls at 0700 GMT. Germany said it would let in only German citizens or residents, commuters, and goods and merchandise traffic.

In normal times, travel over Austria’s borders is generally unrestricted under the European Union’s Schengen scheme.


Austria’s economic research institute IHS said it expects the Alpine country to fall into a recession this year under the impact of the coronavirus.

“This can range from just below zero to a lot lower,” said IHS chief Martin Kocher. In December, the institute had forecast a 2020 growth rate of 1.3%.

Finance Minister Gernot Bluemel, who announced the 2 billion euro loan guarantee scheme, has had to shelve plans for a budget surplus due to the virus’s spread. Asked on Monday how high the deficit could be, he said he could not ascertain that as yet.

Central bank chief Robert Holzmann tried to allay fears among cash-loving Austrians that there could be a shortage in supply. “The Austrian central bank has sufficient cash reserves to supply the banks, the ATMs, but also the economy in any amount,” Holzmann said.

Domestic banks are favourably positioned and have built up commensurate reserves, the central bank said.

(Reporting by Kirsti Knolle, Editing by William Maclean)