The second wave of the Covid-19 epidemic and the new confinements will weigh on the economic recovery in 2021. The European Commission published its autumn forecasts for the economy of the bloc on Thursday.
While the turnaround in activity, following the rebound in the summer, would not significantly affect this year's performance, the effect would be felt more in 2021.
Read also: Covid: is France the country in Europe that has invested the most in the face of the crisis?
For 2020, Brussels forecasts a 7.8% recession for the euro zone, barely worsened compared to the spring forecast of -7.7%.
This is a little less than what the ECB announced in July (-8%).
The effects of the decline in GDP into negative territory in most countries forecast for the fourth quarter appear limited on the total outlook for the year.
On the other hand, the lack of growth overhang and the continuation of the pandemic will hamper the prospects for restarting next year.
The Commission is only forecasting growth of 4.2% in 2021 for the euro zone, against 6.3% expected before the summer.
For 2022, it expects an increase of 3%.
Spain, Italy and France remain the most affected countries
Brussels insists on the disparate impact of the pandemic and the prospects for recovery across the European Union.
The most affected countries remain Spain (-12.4%), Italy (-9.9%) and France (-9.9%).
Those doing the least badly are Finland (-4.3%), the Netherlands (-5.3%) and Germany (-5.6%).
Note the correction of statistics for Ireland, whose recession is expected to be limited this year to -2.3%, against -7.9% forecast in the spring by the European Commission.
"
The second wave of the pandemic shatters our hopes of a rapid rebound," says Valdis Dombrovskis, Vice-President of the Commission.
The EU's economic activity will not return to its pre-pandemic levels before 2022, or even 2023.
”A threshold that we hoped could be expected in the course of 2021 before the second wave, depending on the country.
Even Germany knows that it will take longer.
Especially since the uncertainty and the risks remain very important.
The Commission underlines "
a risk that the scars left by the pandemic on the economy - such as bankruptcies, long-term unemployment and supply disruptions - will be deeper and more lasting
".
Read also: Is the French stimulus plan “the most massive” in Europe?
Unemployment in the euro area will continue to climb, from 8.3% this year to 9.4% in 2021, before declining in 2022. Member states will have to manage record deficits and debt.
Average debt will go from 86% of GDP this year to more than 100% next year and then continue to grow.
Several countries will reach very high thresholds in 2020: 207% for Greece, 135% for Portugal, 120% for Spain and 115% for France.