How a second lockdown could harm European economies?
Saeed Pourreza
Press TV, London
Countries across Europe including the UK, Spain and France are struggling with a new wave of Covid-19 cases. This at a time when these countries’ economies have only just started showing signs of recovery and so new lockdowns, some economists say, may have serious consequences.
Mere talk of a second lockdown has had economists sounding the alarm and sending jitters across the continent. Major European economies such as the UK, France, and Spain, already battered by the pandemic are now struggling with a second wave and not ruling out new strict nationwide measures.
In its latest Summer 2020 forecast, the European Commission warned of a deep recession on the continent blaming it on the lifting of lockdown measures done at a more gradual pace than assumed. It’s a recession deeper than after the 2008 global financial crisis.
But will that recession impact the different European countries equally? The answer is no. Southern European countries such as Greece and Italy are likely to be hit harder than those in the north, in part because of their reliance on tourism.
Earlier this year, the 27-member bloc that Britain is not longer a member of, agreed on nearly two trillion dollars in stimulus and spending packages to help countries in dire need and to spend on climate concerns.
All that is contingent on them getting a handle on the Covid-19. There’s no doubt some of the economic impact of the second wave and potential months long lockdown will be permanent, and that the rate of recovery in each country will depend on how the pandemic progresses and on the decision by governments in individual countries. For now, there are too many unknowns and uncertainties to make any conclusive forecasts.
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