European economy in record decline against virus | Tenterfield Star

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The European economy contracted 3.8% in the first quarter as construction and manufacturing hotel and restaurant activities were frozen by closures to prevent the spread of the coronavirus.

The decline in the euro area of ​​19 countries was the largest since the statistics began in 1995 and steeper than the fall amid the global financial crisis in the first quarter of 2009 after the bankruptcy of the American investment bank Lehman Brothers .

The drop compares to a 4.8% contraction in the United States in the first quarter, as the shock of the epidemic hits economies around the world.

Unemployment rose only slightly, however, amid massive closures that slowed everything from florists to factories.

The number of unemployed in February rose to 7.4% in March from 7.3% in February, the statistical agency Eurostat announced on Thursday.

Millions of workers are supported by short-term temporary programs in which governments pay most of their wages in exchange for companies that refuse to lay off workers.

European statistics likely underestimate the magnitude of the decline, as most shutdowns were only implemented in March, the last of three months of the quarter.

Figures from France, Spain and Italy suggest the magnitude of the slowdown.

France’s economy fell 5.8%, the strongest since the country’s statistical agency, INSEE, began keeping figures in 1949.

The decline was particularly pronounced in services involving face-to-face interaction, such as hotels and restaurants, retail stores, transportation and construction.

Spain’s 5.2% contraction is the worst since the start of the historic series in 1970, according to the National Institute of Statistics, and exceeded analysts’ forecasts by 4.4% compared to the previous quarter .

Spain has had one of the worst epidemics in the world with more than 24,000 deaths linked to COVID-19 and has imposed one of the strictest bans, although officials are convinced that the worst is over.

The Italian economy contracted 4.7% quarterly, according to the official statistics agency Istat, which was the largest since the start of the historic time series in 1995.

The major drop was expected following further coronavirus blocking measures. Italy is one of the countries most affected by the pandemic in the world.

The ANSA news agency quoted Istat as saying that the quarterly contraction was the largest since the start of the current historical time series in the first quarter of 1995.

Companies in Germany have asked for state aid to cover the wages of a record 10.1 million people in the coronavirus crisis, reports the Federal Employment Agency, citing data until 26 April.

This exceeds levels seen during the financial crisis of more than a decade ago, when the German government last turned to its work program to prevent mass layoffs.

The figures precede a meeting of the European Central Bank, which analysts say may expand its bond buying program that supports governments and the debt markets.

The decision may not come on Thursday, but the markets are awaiting an assessment by bank chief Christine Lagarde.

Australian Associated Press



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