The Covid-19 pandemic has brought huge devastation across the world. On top of the devastating human loss, there has also been unprecedented financial losses experienced.
The EU in particular is feeling the financial strain of Covid-19. So, just how badly have economies been hit and how are EU countries dealing with the expense?
How badly have economies been hit?
Economies have been hit hard throughout most EU countries during the pandemic. According to the Organisation for Economic Cooperation and Development, Spain, Italy, France and the UK have been particularly impacted.
If there is a second wave in these countries, it is estimated that gross domestic products will decline by at least 14%. This has led to experts advising the EU to focus on strengthening healthcare and to trace current outbreaks of the virus.
The current prediction for the entire EU economy, is that it will drop by 8.7% throughout 2020.
The pros and cons of the EU fund plan
In order to minimise the economic effects of the coronavirus, an EU fund plan is being proposed. An agreement was made in July 2020, to develop a “Next Generation EU” fund. This allows the European Commission to borrow in capital markets on behalf of the EU. Additional funds that are raised will then be provided to member states in the form of loans and grants.
While this new funding plan could help the economy to recover, it is modest in size compared to national debt levels and the overall EU economy.
How does the UK economy compare?
On 12th August 2020, the UK officially announced it was in a recession. Compared to other EU countries, it has been significantly hit by the effects of Covid-19.
According to experts, the country is going through its deepest recession since records began ? not a feat the UK will want to celebrate! To help the economy recover, interest rates are being kept low, while there is talk of increasing taxes.
Now, more than ever before, the services of financial advisors are invaluable. Businesses would do well to seek financial advisors to aid them in recovery plans.
On the whole, the EU economy has been hit harder than ever before. It’s going to take a long time for the majority of countries to recover. However, the above are just some of the plans being developed to help speed up economic recovery.
