The European Union’s economy will contract by 7.4 per cent this year and unemployment will reach nearly ten per cent, marking the worst recession in Europe since the Great Depression, the European Commission has said.
During the financial crisis at the end of the 2000s, the EU economy shrunk by 4.5 per cent. It had been due to grow 1.2 per cent this year.
The UK’s GDP will drop 8.3 per cent and investment will fall by 14 per cent during 2020, while unemployment will double, the commission said. Only Italy, Greece, Spain and Croatia will see bigger losses, out of EU member states.
Italy, Spain and Greece will see their economic output shrink between 9 and 10 per cent, and unemployment in Greece, which will be the worst-hit country economically, will reach 19.9 per cent.
The EU economy is expected to rebound in 2021, growing by 6 per cent. But the commission warned that “the danger of a deeper and more protracted recession is very real”.
Paolo Gentiloni, European commissioner for the economy, said: “Europe is experiencing an economic shock without precedent since the Great Depression. Both the depth of the recession and the strength of recovery will be uneven, conditioned by the speed at which lockdowns can be lifted, the importance of services like tourism in each economy and by each country’s financial resources.”