The European Union must face the biggest economic crisis in its history – warns the European Commission in its latest spring economic forecasts. In her view, the decline in GDP in the EU in 2020 will reach a record 7.4 percent, and in the euro area alone 7.7 percent. During the apogee of the financial crisis in 2009, the eurozone’s economy shrank by 4.5 percent.
The list prepared by analysts is the first since the coronavirus pandemic broke out. It shows that none of the EU countries will defend themselves against the economic downturn, although differences in its course can be significant. The dynamic growth to take place in 2021 will not make up for all losses.
According to experts, the number of employees in 2021 in the EU will be on average by 1%. below the level recorded in 2019. Which, along with investments 7% lower compared to the autumn forecast, creates a picture of a gradual recovery of the economy. Lower employment and investment reduce potential output, while high job, income and sales uncertainty will reduce demand for some time.
The problem may be the disparity between southern Europe and the north dealing better with the crash. Such divergence threatens the uniform market and the euro area but it can be mitigated by strong joint action at European level.
The public sector deficit due to protective measures for economies will increase in the euro area this year to 8.5%. GDP, from 0.6% GDP in 2019. The situation is expected to improve in 2021, when the deficit is expected to fall to 3.5 percent. GDP.
Inflation in the euro area will amount to 0.2% this year and 0.6% in the entire EU. In this respect, there are significant differences between Western countries and those in our part of Europe, where inflation is to exceed 2 percent. In Poland and Romania, the projected price increase is to reach 2.5 percent, and in Hungary 3 percent Meanwhile, in Germany it is to be 0.3 percent, in France 0.4 percent, and in Italy to deflation amounting to 0.3 percent.
The European Commission also estimates that unemployment in the eurozone is expected to jump to 9.6 percent this year. and up to 9% in the entire EU; in 2019 it was 7.5%, respectively. and 6.7 percent
The highest level of unemployment (19.9%) is expected this year in Greece. It is not much better (18.9 percent of the unemployed) in Spain. Up to 11.8 percent unemployment is expected to rise in Italy, and to 10.1 percent in France.
In Germany, unemployment is expected to reach 9.2 percent this year, while in Poland 7.5 percent The situation is expected to improve next year – the unemployment rate in the EU is expected to fall to 7.9% and in the euro area to 8.6%.