EC forewarns of 'severe socio-economic consequences' in wake of covid-19
The coronavirus pandemic represents a major shock to EU economies with "very severe socio-economic consequences", according to the European Commission's Spring 2020 Economic Forecast.
The official EC forecast predicts the eurozone area's economy will contract by a record 7.75% over the course of 2020 and will then grow by 6.25% in 2021.
The EU economy is forecast to contract by 7.5% in 2020 and grow by about 6% next year. The European Commission said growth projections for the EU and euro area had been revised down by about nine percentage points compared to the Autumn 2019 Economic Forecast.
Europe is experiencing an economic shock without precedent since the Great Depression."
While the pandemic has hit all EU member states the economic impact has varied considerably across different countries. Poland's output for 2020 is down 4.25% YoY but Greece is down a painful 9.75% YoY. The EC said the strengths of recoveries across member states in 2021 "are set to differ markedly."
In its forecast the EC said: "Each member state's economic recovery will depend not only on the evolution of the pandemic in that country, but also on the structure of their economies and their capacity to respond with stabilising policies. Given the interdependence of EU economies, the dynamics of the recovery in each member state will also affect the strength of the recovery of other member states."
Paolo Gentiloni, European commissioner for the economy, said: "Europe is experiencing an economic shock without precedent since the Great Depression. Both the depth of the recession and the strength of recovery will be uneven, conditioned by the speed at which lockdowns can be lifted, the importance of services like tourism in each economy and by each country's financial resources."
"Such divergence poses a threat to the single market and the euro area - yet it can be mitigated through decisive, joint European action. We must rise to this challenge."
Jenna Brown contributed reporting
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