Corona: IMF forecasts recession of the century

The International Monetary Fund has predicted that the coronavirus pandemic will spark the worst recession since the Great Depression of the 1930s. GDPs are set to shrink by 7.5 percent in the Eurozone and around three percent globally. Europe's press voices concern and discusses the consequences.

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La Stampa (IT) /

A new great depression

The IMF forecast comes like a cold shower, comments business journalist Francesco Guerrera in La Stampa:

“Just on the day when almost everyone - politicians, investors, citizens - wanted to start thinking about the world after the coronavirus quarantine, economists have come along and nipped the first glimmers of hope in the bud. ... Anyone who looks into the crystal ball of global gross domestic product will see a parallel to the global economic crisis of the 1930s. This was made clear by Gita Gopinath, Chief Economist at the International Monetary Fund, who speaks of the current recession as the worst economic contraction since the crash of 1929. ... In fact even worse than that one, because in the age of globalisation this economic downturn will spare no country.”

Naftemporiki (GR) /

EU still has a lot more work to do

This forecast means that the current EU rescue package can only be a first step, Naftemporiki stresses:

“The IMF's analysis is impressive, because the predicted performance is on a wartime level. ... The Eurogroup adopted a series of measures on 9 April, which is positive because the loans totalling 540 billion euros can help vulnerable member states take the necessary steps to preserve jobs and media. ... This also sends a message to the markets that Europeans are working together to stop the crisis. But it's clear that other steps must be taken, even more important steps, not only for reasons of solidarity but because it is in the common interest. Germany can manage the crisis at the national level, but if Italy collapses, Berlin will have built on sand.”

The Times (GB) /

Fierce battles over resources in the offing

The economic impact of the coronavirus crisis will make it harder for politicians to make decisions in the public interest, fears Daniel Finkelstein, Conservative member of the House of Lords, in The Times:

“The need for justice may have arisen, but the means to achieve it will have been diminished. As with all similar setbacks, economic and social, there will be a political battle over resources which usually manifests itself in sharper antagonisms and less trust. Just at the moment when there will be political pressure to spend money insuring ourselves against future pandemics and other shocks, there will be much less money to do it with. And people will start to wonder if someone else might have hidden the money, or wasted it or used it on themselves.”

De Tijd (BE) /

No quick recovery in sight

It will be a long time before the economy recovers from this crisis, De Tijd fears:

“The grim figures highlight the devastating impact of the corona crisis for companies. Some will inevitably be driven into bankruptcy, while many others will have to restructure in order to survive. No, this is not a minor flu from which the economy will recover quickly. Fortunately, Belgium has a good unemployment insurance system. ... But that's expensive for the state. So one priority for the post-crisis period must be to get the unemployed back to work as soon as possible.”