Covid-19 in Europe: the immediate economic damage and the remedies become clearer

The European Commissioner for the Economy, Paolo Gentiloni, at the European Union's headquarters in Brussels, November 5, 2020. John Thys / Reuters

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3 min

In Brussels, the economic consequences of the pandemic are experiencing this Thursday, November 5, two significant twists and turns in the three institutions of the European Union.

On the one hand in the Commission, where the observation of the economic disaster is becoming clearer with alarming figures for the deficit and the debt, on the other hand in the Council and Parliament, where an agreement paves the way for the recovery plan.

A recovery plan all the more necessary as the recovery wanes.

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With our correspondent in Brussels,

It will be necessary to wait until 2022, or even 2023, for the European economy to hardly return to the levels before the coronavirus pandemic, according to the European Commission.

She notes that the second wave of Covid-19 has pulled the rug out from

expected for the second half of 2020. And the 2021 rebound will only see the European economy grow by 4.6%, two-thirds of the rebound initially expected.

The recession takes hold in the euro zone with gross domestic product down 7.8%.

It hits France, Italy and Spain hard, where the GDP is down 12.4%.

In these countries and in Belgium, the deficit will exceed 10%, and the public debt will hit all the ceilings in France, Italy and Greece.

► Read also: Covid-19: the EU mobilizes 220 million euros for the transfer of patients between countries

First agreement found, despite reluctance, to design the future recovery plan

In this context, the recovery plan concocted during the July marathon summit is increasingly urgent.

And the agreement reached between the European Parliament and the Council of 27 Member States on Thursday allows some of the clouds to rise above its cradle.

MEPs agreed with the Council to launch the rule of law budgetary mechanism.

Much criticized by

, this mechanism will make it possible to suspend the payment of certain European funds in the event of failure to respect the democratic values ​​of the EU, such as the independence of the judiciary.

This will now make it possible to seek a more general agreement between Council and Parliament on the European budget for the next seven years, a sine qua non for allowing the Commission to borrow on the markets in order to finance the recovery plan.

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• Coronavirus

• European Union

• Economic crisis

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