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As the coronavirus begins to spread across the continent, hopes for economic recovery have given way to reduced expectations.
By Peter S. Goodman
LONDON – Few hopes that Europe was recovering from the economic disaster caused by the pandemic have disappeared when the fatal virus began to spread across much of the continent.
After a strong expansion at the start of summer, the UK economy grew much less than expected in August, by only 2. 1% until July, the government said Friday, adding to fears of additional weakness to come.
Earlier this week, France, Europe’s second-largest economy, reduced its forecast for the last 3 months of the year from 1% to zero. Overall, the national statistics firm predicted that the economy would contract by 9% this year.
Lower expectations are a direct result of the alarm about the virus’s renaissance: France reported nearly 19,000 new cases on Wednesday, a record one day, and nearly double the previous day’s record. The push led President Emmanuel Macron to announce new restrictions, adding the closure of two weeks of cafes and bars in and around Paris.
In Spain, the central bank governor warned this week that accelerating the spread of the virus could force the government to impose restrictions that would lead to an economic downturn of up to 12. 6% this year.
The European Central Bank’s leading economist warned Tuesday that the 19 countries with a percentage of the euro may not emerge from the crisis until 2022, and those that depend on tourism are vulnerable.
Summer more and more as it was a long time ago.
In July, with the fall in contagion rates, the lifting of locks and many Europeans dedicated to the sacred ritual of summer holidays, the symptoms of renewal gave the impression of being abundant. Many European economies have grown strongly as others return to shops, restaurants and holiday destinations. Positive top economists began celebrating the so-called V-shaped recovery, with an uptick as pronounced as the fall that preceded it.
Hope had also been raised through a historic agreement reached through the European Union to raise an aid fund of EUR 750 billion ($883 billion) through the sale of jointly supported bonds through all members. Europe with debt, while noting that the European bloc, little known for its cooperation in the face of the crisis, has reached a new state of solidarity.
But top economists have assumed that the biggest days will only last as long as the virus can be contained. Government restrictions gave the impression of being less vital than consumers’ willingness to interact with others, to return to workplaces and advertising areas.
In a report published this week, Oxford Economics, a research institution in London, analysed eurozone data and noted that much of the improvement at the end of summer was the result of the resumption of factories after the closure. people have to buy the products manufactured through the factories. The willingness to finish is influenced by accepting as true with – if other people feel safe enough to move; if you’re worried about wasting your jobs.
In September, when the coronavirus went back up, the intake decreased.
“Since the adequacy scenario is not expected to be short-term, we expect the recovery to slow down in the coming weeks,” concluded the report, written through Moritz Degler, senior economist at Oxford Economics.
The economic slowdown is occurring at a time when some European economies are beginning to reduce the ordinary sums they have spent to protect staff from unemployment, raising considerations about a likely inevitable increase in unemployment.
In Britain, the government, led by Prime Minister Boris Johnson, aggressively subsidizes the wages of pandemic-affected companies until employers lay down their workers. The public covered 80 percent of wages when the program began in the spring. slow relaxation, the government is paying 60% of the charge this month.
But the licensing program, which charges the Treasury $39 billion (about $50 billion), will expire at the end of the month. Public finance regulator Rishi Sunak expressed fear of Britain’s debt duration as he pledged to balance the books. adjusted replacement program announced last month, the government would cover 22% of wages in the future.
But the immediate deterioration of the economic outlook has forced Sunak to return to the well. On Friday, anticipating stricter trade limits, he announced a new licensing program that would cover two-thirds of the wages of companies that have to close when virus cases increase immediately, which would also generate subsidies. vital in the commercial spaces of northern England, where a wave of elections for the Conservative Party in last year’s election helped keep Johnson in power.
Fears of a waning fortune in Britain have been amplified by the choice that the country simply leave the European Union at the end of the year, the final touch of the tortuous Brexit procedure, in the absence of an agreement regulating long-term trade. can lead to task chaos, especially at ports.
On the other side of the Channel, the fall raised awareness that complex obstacles remain before the European Union aid fund can be managed, restricting customers in the most affected countries such as Spain and Italy.
Spain’s Prime Minister Pedro Sánchez announced on Wednesday a stimulus spending plan of 72 billion euros ($85 billion), and four-fifths of the cash will come from the European fund.
Spain would probably have to wait for that money. The fund is expected to be operational until January, however, it will almost face delays as eups debate the terms of its distribution, in specific regulations to force Hungary and Poland to respect the bloc’s democratic standards.
Customers of the continent for recovery are also restricted by regulations that restrict the debts of EU members and reduce spending. These restrictions have been suspended, but will return, restricting customer expansion.
Italy expects to raise EUR 209 billion ($246 billion) from the European aid fund, but the government has also pledged to reduce its public debt, which exceeded 134% of annual economic production by the end of the year. ‘last year. Such austerity, just as the pandemic raises health care prices, will almost plunge Italy into a longer, deeper recession.
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