The coronavirus pandemic was not unexpected. But the reality is always different from expectations. It’s not just a health threat. The pandemic may also be a greater economic threat than the financial crisis of 2008-2009. Managing it will require strong and intelligent leadership. The central banks made a good start. The burden now falls on governments. No other event better illustrates why a high-quality administrative state, led by people able to differentiate charlatan experts, is so vital to the public.

The question is how deep and long the emergency will be. Economists hope that quarantining entire countries (as in Spain) or parts of countries (such as China) will eliminate the virus. But even if this were true in some places, it would obviously not happen everywhere. The opposite extreme is that up to 80% of the world’s population can be infected. With a mortality rate of 1%, this could mean 60 million deaths equivalent to the casualties of World War II. The disaster is likely to take time: the Spanish flu of 1918 has come on three waves over a year. Still, the result is more likely to be somewhere in the middle: mortality will be lower, but the disease will not disappear.

If so, the world may not return to its pre-crisis state deep into 2021. Younger people may return to normal behavior sooner. But the older ones are gone. Moreover, even if several countries eliminate the disease, quarantines will be maintained in others. In short, coronavirus exposure is likely to be severe and prolonged. At the very least, politicians have to plan for this.

The pandemic has already hit both supply and demand. Blockages are stalling basic supplies and a wide range of purchases, especially in the entertainment and travel sectors. The result will be a sharp decline in activity in the first half of this year.

Above all, we are at risk of depression. Many households and businesses are likely to run out of money soon. Even in rich countries, much of the population has almost no cash reserves. The private sector – most notably the non-financial corporate – has also sunk into debt.

This will weaken user demand even more. The business will go bankrupt. People will refuse to sell to companies that are likely to go bankrupt unless they can offer upfront payment. There will again be doubt about the health of the financial system. There is a risk of a collapse in demand and economic activity that goes beyond the direct impact of an emergency.

It will also be particularly difficult to limit the spread of the disease in countries with limited social security and poor social control. This will affect, above all, the United States: many sick people will refuse to go to the hospital and will also be forced to work. Social security is effective.

As lenders of last resort, central banks need to provide liquidity by keeping borrowing costs low and financing lending directly and indirectly. But central banks cannot provide solvency. They cannot support household incomes or insure businesses against this downturn in demand. Governments, such as borrowers and consumers of last resort, can and should do so.

The long-term sovereign debt is so cheap that they should not be afraid to issue one: Germany, Japan, France, and the UK are already able to borrow for 30 years at a nominal rate of less than 1%, Canada – at 1.3% the United States – at 1.4%.

This, then, is a time-limited crisis with economic and health implications that governments must manage. Internally, the minimum is the generous provision of paid sick leave and unemployment benefits, including freelance workers, during the crisis. If this is too difficult, governments can simply send any check.