The European Union (EU) predicted the greatest economic recession in history due to pandemic coronavirus. EU may not survive its aftermath and decay, writes Bloomberg.
According to the Agency, the main problem of Europe was that the coronavirus with a different degree hit the economies of the EU. If overall European GDP would fall 7.7 percent by the end of 2020, when considering the predictions for individual countries the figures vary widely. So, the States of southern Europe, more dependent on tourism, will suffer than the rich Nations of the North Eurozone. According to forecasts, the GDP of Greece, Italy and Spain will fall at the end of the year more than 9 per cent, Germany and the Netherlands only 7 percent.
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“the Cost of anti-crisis program will increase the pressure on already swollen to the limit of state budgets, expanding the gap between Northern and southern European countries and urging the bloc to a critical point”, — writes the Agency.
So, Italy’s national debt is expected to rise for the year to 159 percent of GDP, Greece’s national debt will approach 200 percent. According to European Commissioner for economic and financial Affairs, Paolo Gentiloni, this situation divides the EU and threatens the future of the European single market. To mitigate the effects will be possible only if the European authorities will develop a single plan of salvation.
The leaders of 27 countries-EU members in April approved an emergency program to rescue the European economy with a volume of 540 billion euros, which will launch on 1 June. One of her points was the creation of a common Fund recovery of the EU economy, but the idea was faced with heated disputes over funding. More affluent and less affected countries did not want to freely give additional funds to less wealthy and more affected the Alliance partners.
In the first quarter of 2020 GDP in the Eurozone fell 3.8 percent. The international monetary Fund (IMF) predicts that by the end of 2020 GDP of Italy and Spain will shrink by 9.1 percent and 8 percent, respectively. French GDP will lose 7.2 percent, the German economy at 7 per cent.