European Commission: EU Economy Is to Face a Historical Proportion Recession

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“Europe is experiencing an economic shock never happened since the Great Depression,” European Commissioner for Economics Paolo Gentiloni said, presenting the EU spring economic forecast. According to the spring economic forecast of the EU presented in Brussels on Wednesday, May 6, the eurozone economy could go down by 7.7 percent. "Europe is experiencing an economic shock, never happened since the Great Depression," said European Commissioner for Economics, former Italian Prime Minister Paolo Gentiloni. In particular, the European Commission expects that the gross domestic product in 27 EU countries will decrease by 7.4 percent in 2020 and will increase by about 6 percent in 2021. At the same time, for different states these indicators vary significantly: from minus 4 percent in Poland to almost minus 10 percent in Greece. The pace of economic recovery will also be different. According to the European Commissioner it all depends on the pace of lifting quarantine restrictions, the dependence of the economy on tourism and the financial possibilities of the budget. However, such inequality is a serious threat to the unity of the domestic market and the eurozone. “We must deal with this problem,” Gentiloni emphasized. The EU unemployment rate is expected to rise from 6.7 percent in 2019 to 9 percent in 2020. A year later, according to the European Commission, it will decline slightly, stopping at around 8 percent. It will be especially difficult for young people who have to find their first job. High uncertainty forecast As EU countries spend billions of euros to counter the crisis caused by the coronavirus pandemic, the EU commission expects an increase in budget deficits. The total cost of the state deficit of all EU countries in 2019 was about 0.6 percent of GDP. It is expected that in 2020 it will grow to 8.5 percent with a subsequent decrease to 3.5 percent. Introducing the forecast, the European Commissioner noted his extremely great uncertainty. It is based on the fact that EU countries will gradually weaken quarantine measures in May. If the fight against the pandemic takes a longer time and requires more serious investments, this could lead to an even greater decline in economic indicators, Gentiloni said.