EC Announces Recovery Plan. The European Commission, the governing body of the European Union (EU), has laid out its plan for the continent’s economic recovery.
The commission proposes a €750-billion recovery fund, with €250 billion available as loans to individual nations and €500 billion given as grants with no repayment required.
Giuseppe Conte, Italy’s prime minister, called the €750 billion “an adequate figure,” while Spanish prime minister Pedro Sanchez said it was “a starting point for negotiation.”
Both Italy and Spain were among Europe’s nations hardest hit by the pandemic and economic shutdown.
The balance of loans versus grants remains controversial with Austria, Denmark, Finland, and the Netherlands, known as “the frugal four,” arguing that a greater proportion of the bailout funds should require repayment.
In addition, the EU’s budgets through 2027 will add another €1.15 billion focused on recovery.
PUBLISHER’S NOTE: As we have noted in this issue in our COVID section, Sweden did not shut down its economy, and while it experienced a higher virus death rate than other Baltic states, its per capita COVID-19 death rate is about the same as France, the U.K., and other European nations that have been locked down.
Moreover, as nations across Europe sink into recession, Sweden’s GDP grew at an annual rate of 0.4 percent in the first quarter. Thus, while the lives lost in Sweden – 4,395 virus deaths out of a population of 10,000,000, or .044 percent – unlike other nations where suicide, addiction, and depression are skyrocketing, Sweden’s businesses were not destroyed, people’s futures not delayed by decades or ruined altogether, and other critical-care medical patients whose lives were saved instead, were among other trade-offs.
France: Unemployment Soars, Consumer Confidence Falls. The French jobless rate jumped by a record 843,000 people or 23 percent in April, bringing the number of people out work to 4.57 million, according to the country’s labor ministry.
Most of the increase came from workers on short-term contracts unable to find new gigs.
Meanwhile, the European Commission’s May survey of business and consumer economic sentiment nudged up 2.6 points to 67.5, moving deeper into positive territory. Confidence in the service sector sagged slightly, but less than in April’s poll.
Respondents also remained worried about losing their jobs or seeing their work hours cut and reported intentions to save more and spend less.
The survey sampled 135,000 businesses and 32,000 consumers. Analysts saw the poll’s result as pointing to a slow economic recovery.
In April, retail sales in Spain fell at a record 31.6 percent and in Germany’s non-financial businesses by 13.8 percent, the fastest monthly decline on record there.
“Households’ worries about unemployment remain high and close to those seen during the global financial crisis,” said Daniela Ordonez, an analyst at Oxford Economics.
TRENDPOST: All signs point to a recovery that’s not V-shaped or U-shaped or any shape. The recovery will have ups and downs, surges and craters that will vary country by country and by economic sector. The one common feature national recoveries will share is that they will be falling into the “Greatest Depression.”
