Worse-than-expected recession in Europe

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The European Commission has downgraded its activity forecast for the year due to a “ economic impact of the containment more serious than what we had initially planned “Said Vice-President Valdis Dombrovskis on Tuesday. Instead of the 7.7% forecast for May, the decline in euro area GDP for this year would ultimately be 8.7%. An estimate similar to that of the European Central Bank.

France (-10.6%), Spain (-10.9%) and Italy (-11.2%) will be the countries most affected, in line with their health balance sheet. Conversely, Poland (-4.6%) will suffer the least pronounced decline (see page 23). As the leading European economy, Germany will limit its loss of activity compared to last year to 6.3%, like Luxembourg, Malta and Finland. There are already signs of recovery across the Rhine.

According to the first data for May and June, the worst could be over. The recovery should accelerate in the second half, even if it remains incomplete and uneven from one State to another. European Union GDP is expected to rebound by 5.8% next year (+ 6.1% for the euro zone). From the back of the peloton this year, France should climb to the head of the recovery movement in 2021 with a 7.6% increase in its GDP.

«Uncertainty” is “big»

However “ the uncertainty surrounding these forecasts ” is “ big “And the economic risks” devastating Remain high, according to Paolo Gentiloni, European Commissioner for the Economy. “ We must not think that the experience of the Spanish flu will repeat itself “, He wants to hope. But he highlights the risk of “ increasing divergence, inequality and insecurity Between member countries. Hence the urgency of a rapid adoption of the European recovery plan of 750 billion euros, which will be discussed by the heads of state and government in Brussels next week.

« We continue to navigate troubled waters and face many risks, including a new major wave of infections Valdis Dombrovskis feared. Conversely, availability “ quick Of a vaccine would allow an accelerated recovery scenario.

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