The resurgence of the pandemic in recent weeks is causing disruptions: The lockdowns would put the recovery on hold.
The bad news They followed without room to catch the air. The first: Brussels confirms the worst economic year in the history of the European Union. Second, Europe is experiencing an “explosion” of coronavirus cases, and the death rate is also growing.
“We see an explosion (…) in the sense that it only took a couple of days to see how the European region registered an increase of more than a million cases,” explained the WHO regional director for Europe, Hans Kluge, in an interview with AFP. “We see how mortality grows little by little,” he continued.
Hours before, Brussels confirmed the economic disaster.
The European Union will suffer this year the biggest economic contraction of its history with a recession of 7.4% of GDP, 7.8% for the countries of the Eurozone. Until this year the worst year had been 2009, when after the outbreak of the financial crisis the European Union fell by 2.9%.
The numbers are used to count for example that all Europe follows a bumpy road this year: very rapid decline in the last weeks of the first quarter coinciding with the first lockdowns, unprecedented sinking in the second quarter, also historical growth in the third quarter due to the loss of lockdown and a drop in the fourth quarter, although much less of the second.
Economic forecasts ensure that the pandemic you’re a shock for the global and European economies with severe social and economic consequences. And he estimates that “the resurgence of the pandemic in recent weeks is causing disruptions because national authorities introduce public health measures to limit infections.”
Thus, Brussels recognizes that “the epidemiological situation causes the growth projections on the horizon studied by these forecasts to be subject to a degree very high uncertainties and risks ”. In old Spanish: that he doesn’t have much idea of what will happen in the next two years.
These forecasts are partly out of date. Brussels cannot know what confinement measures will end up being approved in November and December before the coup, resounding, hard, deadly, of the second wave of the virus, or what economic impact these measures will have. In addition, these projections are made with updated data up to October 22 and much of that data became old last week when national governments informed the European Commission of their real growth in the third quarter. An example: Spain grew by 16.7% between July and September when Brussels expected it to do so by 14.2%.
The European Commissioner for the Economy, the Italian Paolo Gentiloni, said Thursday that the pandemic has caused “the worst recession in the history of the European Union.” Gentiloni left several key messages: let’s not expect a V-shaped start, “because clearly it is not going to happen.” He also warned that external factors will not help European growth because the economic smack is global.
The biggest falls in GDP this 2020 are seen Spain (-12.4%), Italy (-9.9%), France (-9.4%), Portugal (-9.3%) and Greece (-9.0%). Germany will fall by almost half, 5.6%, the Netherlands 5.3% and Belgium 8.4%.
2021 and 2022 they will see rebounds, but less than expected so far. The European Union will grow by 4.1% in 2021 and 3.0% in 2022. Germany will grow by 3.5% and 2.6%. Spain 5.4% and 4.8%. France 5.8% and 3.1%. Italy 4.1% and 2.8%. The Netherlands 2.2% and 1.9%.
The red numbers are on the rise due to the massive injections of public money to sustain economic activity and the income of those most affected. The public deficit of the Eurozone, which closed 2019 at 0.5% of GDP, will do so this year at 8.5%. Spanish will go up to 12.2%, Belgian to 11.2%, Italian to 10.8% and French to 10.5%. The good news for national governments is that the European Commission confirmed by letter in September that it will not ask for adjustments in 2021 and it remains to be seen if it will do so in 2022.
Public debt is also skyrocketing. The Greek will go from 200% this year (207.1%), it will fall to 200.7% in 2021 and to 194.8% in 2022. The Italian will jump to 159% this year and at that rate it will continue both Next years. Even the French will reach record levels: 115.9% in 2020, 117.8% in 2021 and 119.4% in 2022.
The European Union will see unemployment rise a little more than two points this year to 7.7% and in 2021 to 8.6% to begin reducing it in 2022, when it should fall to 8.0%. The worst data will be in Greece (18%, 17.5% and 16.7%), Spain (16.7%, 17.9% and 17.3%), Italy (9.9%, 11.6% and 11.1%) and France (8.5%, 10.7% and 10.0%). Germany will continue to have an enviable unemployment rate of 4.0% this year, from 4.0% in 2021 from 3.8% in 2022.
The economic forecasts are made taking into account a no-deal Brexit scenario and on which trade relations with the United Kingdom would be based, as of January 1, on the general terms of the World Trade Organization, with the possible introduction export tariffs and quotas.