The European Commission said in its “Summer 2020 Economic Forecast”, that Europe will fall into a deeper recession this year and will take longer to recover from the Corona-virus crisis than previously expected.
Valdis Dombrovskis, the Commission’s VP declared in a statement to expect a rebound, but people will need to be vigilant about the differing pace of the recovery, in order to protect workers and companies and to coordinate policies closely at EU level to ensure the block will emerge stronger and united.
The EU27 economy is forecast to contract by 8.3% in 2020 and grow by 5.8% in 2021. The updated forecast, based on “critical assumptions,” does not include a second wave of infections that would trigger renewed lock-down measures.
For now the economic impact of the fabricated lock-down “is more severe” than expected. The economies of Italy, Spain and Greece are expected to contract by over 10% this year, whereas Germany, and the Netherlands will face a milder contraction.
This is why it is so important to reach a swift agreement on the recovery plan proposed by the Commission – to inject both new confidence and new financing into our economies at this critical time,” said Paolo Gentiloni, the Commission’s for Economy.
EU leaders are set to meet in person on July 17 and 18 for an extra-ordinary EU summit, in a bid to reach an agreement before the summer break.
The €750 billion Next Generation EU package proposed by the Commission has prompted divisions among the bloc’s members, with the “frugal four”, namely Austria, Denmark, the Netherlands and Sweden supporting the provision of loans that need to be paid back, instead of grants to countries hit by the pandemic.
New Europe / ABC Flash Point News 2020.