Coronavirus could break the EU

The epidemic’s economic shock could easily exceed that of the 2008 financial crisis.

 
The European Union may have survived Brexit, the refugee crisis and the financial meltdown of 2008 — but don’t assume COVID-19 can’t destroy it.

For better and for worse, crises create opportunities for extraordinary politics. European leaders, including the eurozone’s top central banker, Christine Lagarde, would be foolish to think that the ongoing pandemic is different just because it is a public health crisis — and not a political or financial one.

Besides the cost in terms of lives and public health, the pandemic has created an economic shock on a scale that could easily exceed the 2008 financial crisis. While the Great Recession resulted from a financial shock that reverberated through the U.S. and European economies, the entire world now faces a massive downturn across all sectors of the economy.

“Social distancing” invariably means less economic activity for everybody. In the coming weeks, if not months, people will work less, invest less and spend less. Inevitably, balance sheets will deteriorate and otherwise profitable businesses will go under — unless there is a clear commitment from public authorities to stabilize the economy.

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Πηγή: politico.eu