Is Europe heading for a K-shaped economic recovery?
As Europe’s economy struggles to fully reopen, reminders that this crisis is far from over dot the urban landscape of Europe: from social distancing signs to the empty cafes and shuttered businesses.
As coronavirus cases surge across much of Europe, there are fears about the return of lockdowns and the further economic damage it would cause.
But at the Brussels Economic Forum, the EU Commission’s vice president Valdis Dombrovskis told Dailyrater that he hoped that lockdowns like in March could be avoided.
“We are dealing with a pandemic here, so when dealing with a pandemic first and foremost we need to seek epidemiological advice, so this is what has been followed by member states in spring and this is what is followed by member states also now. So currently there is no epidemiologist advice saying that we should go back to generalised lockdowns and hopefully it is not going to happen,” said Dombrovskis.
The Commission argues its economic policies are already working.
“If we compare the European situation to the US situation, yes we have had consequences in the labour market and unemployment and especially employed people decreases but nothing comparable with what happened in America,” economy commissioner Paolo Gentiloni told Dailyrater.
What then about the recovery? Talk about a V-shaped one has been replaced by one resembling the letter K.
A recovery where the wealthier emerge better off, where the office worker keeps their job but the waiter loses theirs and where Germany uses its financial might to get stronger and where Italy becomes weaker.
But the European Council President Charles Michel told Dailyrater that the recovery fund was designed to prevent this.
“I’m convinced our decision, the fact we have mobilised €1.8 trillion in the next two years, the fact also that to mobilise the grants in order to support all the member states, especially the most affected regions and the most affected sectors it is the best demonstration of our political will for more European solidarity in the future,” explained Michel.
Europe does have a plan to get business back to normal and staff back to work
But with the continent facing yet more uncertainty – the test of whether it will be enough, is yet to come.