2021, a high risk recovery in Europe

Rarely has the European Union (EU) started a new year in such fog. In early January, the list of uncertainties makes you dizzy: what will be the horrors of the third wave of Kovid-19? Will the new strain of viruses appearing in the United Kingdom delay the end of the crisis? After all, how long will our economies and social fabric survive the drip?

In the scenarios carefully followed by economists for the coming months, the development of the epidemic and its control will play an important role.

There are many fears that inequalities will become widespread among member states, businesses and families. Because it will be a decisive year between the end of the epidemic and thinning than expected, 2021 will be at high risk. For the states, a major stake: to succeed vaccination campaigns, without which neither confidence nor activity will resume. But at the same time deploys measures in which the economic and social damage will be as much as possible which will bring a crisis on our countries.

  • An uneven rebound in activity by states

If vaccination campaigns started in the European Union in late December 2020, they would not be enough to escape, in the first months of 2021, new restrictions are necessary to curb the epidemic.

In the central scenario established by the British firm Oxford Economics, provided that no mutation in the virus changes the status quo, the EU should be able to vaccinate vulnerable people – around 30% of the population – by the end of the first semester. This will pave the way for a solid, strong, recovery at the end of the year with increased consumption and investment.

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“At the end of 2022, GDP [PIB] The euro area will have its own growth deficit compared to the end of 2019 (+ 0.7%) ”, Economists at Credit Agricole say. But this recovery will be very uneven depending on the country: “At the end of 2022, Germany and France can achieve 1.2% and more than 0.5% GDP compared to the end of 2019; On the other hand, it will still be 0.7% lower in Italy and 3.3% in Spain. ”

And for good reason: Depending on the level of pollution, the harshness of the restrictions, and the composition of the productive fabric, the epidemic has affected some countries more than others, especially in southern Europe, which is heavily dependent on tourism. According to the European Commission, Spanish GDP requires a 12.4% incidence in 2020, while 9.4% in France and 5.6% in Germany, before rebounding to 5.4%, 5.8%, and 3.5% in 2021, respectively.

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