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Almost empty restaurant in Barcelona (on November 23): State support is needed even longer, believes the IMF
Photo: LLUIS GENE / AFP
After the deep crash in the spring, the economy in the euro zone has been recovering significantly since the summer - but now, according to the International Monetary Fund (IMF), the second wave of corona infections threatens to slow down this process.
If the situation in the pandemic does not change significantly in the next few months, growth in the first quarter of 2021 will be lower than last expected, the IMF said.
However, the IMF did not provide specific figures on how high or low growth could be according to its forecast.
The current outlook is fraught with immense uncertainty, especially because of the pandemic, which needs to be narrowed down, according to the assessment.
The IMF recommends that the 19 countries in the euro zone continue with their extremely loose financial policy since the outbreak of the corona crisis.
Because of the second wave, this will probably take longer than initially thought.
"To withdraw such support too early would throw the recovery off the track." Most recently, the government funds have primarily prevented companies from going bankrupt and even more employees losing their jobs.
Also important is the EU's 750 billion euro recovery fund, which could become a noticeable driver of the economic recovery, according to the IMF.
Here Europe must overcome the last hurdles in the implementation and distribution of the funds.
"Further delays would worsen the prospects for the recovery in the eurozone."
Hungary and Poland are blocking the disbursement because they are bothered by the fact that the funds should be linked to compliance with the rule of law, such as the independence of courts and the media.
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fdi / Reuters
