Economic consequences of the corona pandemic in Europe and suitable political measures

_ Dorine Boumans, Pauliina Sandqvist, Stefan Sauer. Ifo Institute. Munich, 26.October 2020. Translation into English by Yuri Kofner.

An ifo expert survey [1] indicates both short and long-term noticeably negative effects of the corona pandemic on economic development in Europe. The recovery phase is therefore likely to be slow. The current EU strategy for crisis management is particularly popular with southern European experts.

The economists surveyed expect a massive slump in GDP across Europe with significantly negative GDP change rates for 2020, followed by a recovery in the next year, but also by a long phase of economic recovery. In addition to the short-term impact on economic activity, it is believed that potential GDP will also be negatively impacted by this crisis. The experts’ expectations are also shaped by the high level of uncertainty surrounding the pandemic with the risk of a second wave in many countries and the serious effects that new lockdown measures could have on economic recovery. Another important finding of the survey are the assessments of the experts with regard to effective political measures to overcome the crisis. They believe that liquidity support for companies and improvements in health systems make the most sense. The current EU strategy for economic support for the member states is seen as sensible, especially by the economists from the southern European countries surveyed.

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  1. Between August 12 and 29, 2020, the Ifo Institute carried out a global survey on the economic effects of the corona pandemic as well as political measures for crisis management among 950 economic experts in 110 countries. The survey was carried out as part of the panel of the Ifo World Economic Survey. When selecting the participants for the survey, the focus was on their professional competence in economic issues as well as on extensive knowledge of their reporting countries. See Boumans and Garnitz (2017) for more details.

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