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A prominent European Central Bank (ECB) politician added his voice to growing concerns that renewed COVID-19 restrictions could cause further recession in the continent’s economy.
Already Ireland and the Czech Republic have imposed a full return blockade mode due to an increase in COVID-19 cases. At the same time, hospitals in major European cities – such as Paris and Madrid – are already sounding the alarm that new increases in patient burden are not sustainable.
On Wednesday (4 November), ECB policy officer and Bank of Spain head Pablo Hernandez de Cos warned that Spain and other European economies could slow down and even contract. Reuters reported that it told Spanish lawmakers: “The widespread implementation of new measures to contain the health crisis could lead to a significant slowdown in business expansion, and even a contraction, at least in some countries or sectors in the fourth. quarter. “
The euro zone economies of 19 countries shrank 11.8% in the second quarter when the COVID-19 blockades went into effect, but rebounded 12.7% in the second quarter, July to September, according to Reuters.
With over 1.2 million cases and over 36,000 deaths, Spain has been particularly hard hit by the pandemic. The recent surge in coronavirus cases means the ECB’s worst forecast for the Spanish economy – a 12.6% decline this year – has become more likely, de Cos said.
Europe managed to curb the pandemic during its first coronavirus wave in the spring. However, the price was high, as the continent experienced its worst economic recession since the Great Depression. According to a McKinsey study, more than half of Europe’s small and medium-sized enterprises (SMEs) are likely to collapse within the next year if their revenues do not improve significantly. Italian and Spanish SMEs have been particularly hit by the economic and health crisis.
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