COVID-19 Wreaks Economic Havoc Across Europe [Infographic]

On Wednesday, the European Commission released its Spring 2020 Economic Forecast which starkly illustrates COVID-19’s impact on the economies of its member states. The collective GDP of the 27-country bloc was forecast to grow 1.2% this year but the economic havoc wrought by the pandemic is now expected to lead to a contraction of 7.4%. The scale of that figure is put into perspective by the Financial Crisis in 2009 when the decline suffered by the EU-28 was 4.5% by comparison. The current crisis has now pushed the EU into the deepest recession in its history and unemployment rates are set to spike. In 2019, EU unemployment was 6.7% and that figure is predicted to grow to 9% this year.

As the following infographic shows, no European country is going to emerge from the current crisis unscathed. Much of southern Europe, which has traditionally struggled economically with high levels of unemployment, is going to suffer the worst impact. Even though Greece has largely turned a corner since the Financial Crisis and has earned plaudits for keeping its COVID-19 outbreak under control, it is forecast to suffer the worst hit to GDP of any EU country with a 9.7% decline. Italy and Spain, two countries that have been devastated by the pandemic, are also expected to suffer contractions of more than 9% this year.

Germany has also been recognized as doing a stellar job containing the pandemic but it also looks set to experience its deepest recession since the Second World War. Europe’s economic powerhouse is predicted to see its GDP shrink by 6.5% despite having a mortality rate far lower than many of its neighbors. As grim as the data is, there is light at the end of the tunnel. While the situation remains extremely serious in the United Kingdom, many other European countries feel that the worst is behind them and have started easing their lockdowns.

After 7 weeks of extraordinarily restrictive measures, Italians emerged from their homes at the start of this week while Angela Merkel has announced that Germany’s schools and restaurants are set to imminently reopen. While the first green shoots of recovery are immensely positive, a lot is going to hinge on whether a second wave of the virus arrives, resulting in a rollback of the restrictions and even deeper economic damage. Bearing that in mind, the European Commission cautioned that fundamental uncertainty surrounds the forecast and that the danger of a deeper and more protracted recession is very real.

*Click below to enlarge (charted by Statista)