7 ms·

Europe's recession will be even deeper than expected

84 points by LinuxBender 6y ago

parsimo2010 6y ago
I'm not really that interested in the article, but thank you OP for linking to the lite version of CNN. It loaded so fast and didn't have any autoplaying videos. But related to the article- We have multiple continents that are significantly curtailing their output due to the pandemic, and it will last for a while yet. I'm a little surprised to see that they think Europe will contract by only 8.3%. That might make sense if it were just Europe being affected by the pandemic but all of their trading partners are affected too. I don't think they've accounted for how the entire world going down at once is going to effect the EU as a multiplicative effect, not an additive effect.
- simonh 6y ago
  It's a reasonable concern, but a look at the report indicates they seem to have attempted to take into account the effects on the EU's main global trading partners. You can get the report here. https://ec.europa.eu/info/business-economy-euro/economic-performance-and-forecasts/economic-forecasts/summer-2020-economic-forecast-deeper-recession-wider-divergences_en https://ec.europa.eu/info/business-economy-euro/economic-per...
  - parsimo2010 6y ago
    The report claims that their economy will take a 17% hit in the first half of 2020 (it has already taken this hit, but it takes a while for the accounting to shake out). And they're claiming that the yearly hit will only be 8.3%. I understand that they are trying to take a lot of things into account, but this forecast is too optimistic. Europe won't bounce back that much in H2, because their recovery will only happen at the pace of everyone else's recovery.
    - simonh 6y ago
      I agree it's optimistic, it assumes no second wave which is actually already happening and is sure to happen elsewhere in the world too.
      - WinstonSmith84 6y ago
        Nothing proves that a "real" second wave will come with a similar lockdown to the first one. The first lockdown was catastrophic for the economy of some countries and didn't really help anything at all in regard to the health (best example is France/Spain vs. Germany). It seems (some) countries have learnt the lessons and now apply successfully limited restrictions (masks, social distancing, limited gathering, etc.) and this shall be the sweet spot for limiting contamination while not impeding further the economy. Arguably one shall not, again, underestimate governments for self-sabotaging themselves, but we can hope to see more reasonable measures being undertaken.
        autokad 6y ago
        > "Nothing proves that a "real" second wave will come with a similar lockdown to the first one." I dont know about similar lockdowns, but its reasonable to be concerned about a 2nd winter wave. We seen what happens once winter time comes in Brazil
        mercer 6y ago
        Let's hope Covid took Bolsonaro by then and his replacement isn't somehow worse...
        sveme 6y ago
        > didn't really help anything at all in regard to the health (best example is France/Spain vs. Germany) I believe France and Spain were simply already much further on the wave than Germany when they enacted the lockdown. Without the lockdown, things would have probably been much worse.
        simonh 6y ago
- 082349872349872 6y ago
  Our government has explicitly said we won't have any hope of returning to our economic status quo ante until such time as the rest of the world is ready to import our exports. So I selfishly ask you all to wash your hands and keep your distances, please.
  - credit_guy 6y ago
    Same here. And I don't even care that much if you wash your hands, as long as you wear a mask in all indoor places that are not your home.
    - Johnjonjoan 6y ago
      Hand washing is a must. German studies have found people infected each other passing salt shakers and lighters. Whilst we can't tell what vector the virus took, the lighter incident happened outside AFAIK, so likely it was from hand contact.
      - credit_guy 6y ago
        It doesn't hurt, of course, but focusing on that may lead people into thinking face coverings are less important. They are by far more important. "We conclude that wearing of face masks in public corresponds to the most effective means to prevent interhuman transmission" [1] https://www.pnas.org/content/117/26/14857 https://www.pnas.org/content/117/26/14857
Proven 6y ago
Deeper than expected by the clueless (or lying) idiots who run the ECB and other government organizations in charge of making fake predictions for the betterment of the populace. We've been hearing "worse than expected" for over a decade now. CNN still doesn't get it. Or maybe they simply knowingly spread these obviously fake news.
orwin 6y ago
Growth expected to return by 2022 then? European oil providers supplies were supposed to be contracting by 2028 according to data from Rystad, before the pandemic, mostly because of below ground issues (and with very, VERY optimistic previsions concerning above ground issues imo). So anyway, Covid or not, European industrial production will peak this decade. Times will be harder and harder for a lot of people.
- abyssin 6y ago
  A bad economy is good for the climate, which is good for the economy.
  - throwaway_pdp09 6y ago
    And that's what an optimist looks like.
  - ars 6y ago
    I'm bad economy means no money for environmental projects. It's not a good thing.
  - Ghjklov 6y ago
    Bad economy might lead to wars and conflicts. But if it kills a lot of people, I guess that's good for the climate in the long game. Wars are also great for the economy assuming you survive. Wow, the outlook for the next decade is fantastic.
    - abyssin 6y ago
      I personally can hardly handle thinking about the future without taking the possibility of conflicts caused by the climate mess into account.
      - mercer 6y ago
        I don't know your age, but I've been rather worried about the fact that almost all my < 30 years old friends seem to be some degree of 'doomer'. Whether it's climate, the economy (and the prospects of retirement), or even just expectations if what their next few decades will be like. Obviously I don't just worry that they feel this way, but also that they probably have a good reason for feeling this way, but either way it's worrying.
gavribirnbaum 6y ago
8.3% cause everything is fine and Covid will be gone next week... right?
- mercer 6y ago
  that comment is even more useless than this one.
WhompingWindows 6y ago
COVID is the massive elephant in the room that this article doesn't fully address. Everyone is very focused on GDP, but this is merely a single metric. What about new cases, patients hospitalized, patients dying from COVID? These have dramatic repercussions for economic policy, and it seems the countries doing the best right now economically are those who handle COVID the best.
- wnmurphy 6y ago
  Global warming is the same issue. We don't seem to realize that the economy kinda sorta depends entirely on the environment, just like the economy kinda sorta depends entirely on public health.
pjmlp 6y ago
Looking to many people that I know that I quite obvious. Plenty of people are still not able to work, and it is not like everyone can work from home.
war1025 6y ago
A thing I've thought is really interesting on how the news is covering Coronavirus here in the US is they like to talk about all the economic harm going on in the US and then they blame it on the government response rather than the pandemic itself. I've heard more than one news piece where they imply that Europe and Asia will be somehow spared from the economic fallout of putting their countries on lockdown for months on end. Then in the next piece they'll talk about how the US unemployment rate is off the charts and find a way to blame the Trump administration for it. The economy is suffering because we slammed on the brakes in what (at least at the time) seemed like a prudent measure to avoid a worse fate. Now we have to pay the price for that. Choices have consequences.
- funcDropShadow 6y ago
  Well, a country will have less economic fallout if it manages to keep SARS-Cov-II at bay. Trump managed to evoke the collateral damage of a lockdown without the full benefits. And that is on the government.
  - war1025 6y ago
    > Trump managed to evoke the collateral damage of a lockdown without the full benefits. Besides the fact that the Federal government doesn't actually have the authority to invoke a lockdown, and it was done on a state by state basis, yes the Federal government did advocate for it. As to the benefits of the lockdowns as performed in various countries, I think it really remains to be seen how badly the US will be affected vs the rest of the world. As of right now, yes, the US looks particularly bad in terms of the number of infections / deaths. But it's also an area the size of Europe with the vast majority of the deaths restricted to New England. I wonder how things would look if you compared individual states to European countries. For example, here in Iowa, we're at I think 700 deaths and 30,000 confirmed cases. That doesn't seem too catastrophic to me.
    - Symbiote 6y ago
      You can make your comparison with these two pages: - https://www.worldometers.info/coronavirus/ https://www.worldometers.info/coronavirus/ ("Europe" is all Europe, not just the European Union. That's 747 million people.) - https://www.worldometers.info/coronavirus/country/us/ https://www.worldometers.info/coronavirus/country/us/ In that case, Iowa is doing very badly for cases/1M. I don't know if the comparison is fair, it might depend on who is tested. For deaths/1M, it's somewhere around the European average. Some European countries are very densely populated, like Belgium, the Netherlands, others less. Though much of Europe is as dense as New England.
subsubzero 6y ago
This pandemic will be alot worse in economic terms than predicted. So far the only bright spot will be deaths seem to have really dropped, but death is a low bar compared to having severe chronic symptoms after infection. Alot of people have really shut down spending(my family reduced it by 50%) Expect international travel/tourism to be completely shutdown as well as a majority of restaurants and bars until prb early 2021. Sports and concerts also. That is a considerable chunk of the economy. Will a majority of these restaurants even exist next year? A few assumptions that have been proven wrong with covid-19: 1. The virus will subside in the summer like the flu does. Based on cases in the US and other areas (sans Europe) skyrocketing right now this is absolutely not true, forget a 2nd wave we have a growing mountain of a 1st wave hitting the US/Americas now. 2. Children are not really affected by covid. Israel had to shut its schools down after cases there were jumping, in addition kawasaki disease seems to be prevalent in a higher percentage of infected children than normally seen. 3. Antibodies will offer protection against covid-19 after being infected. This too has been disproved although the jury is not out yet. Studies have seen neutralizing antibodies stay in a persons system for about 2-3 months. There are other ways the body knows how to fight an infection so this is not definitive yet.[3] [1] - https://www.washingtonpost.com/nation/2020/07/07/coronavirus-live-updates-us/ https://www.washingtonpost.com/nation/2020/07/07/coronavirus... [2] - https://www.npr.org/sections/coronavirus-live-updates/2020/06/03/868507524/israel-orders-schools-to-close-when-covid-19-cases-are-discovered https://www.npr.org/sections/coronavirus-live-updates/2020/0... [3] - https://www.cidrap.umn.edu/news-perspective/2020/06/chinese-study-antibodies-covid-19-patients-fade-quickly https://www.cidrap.umn.edu/news-perspective/2020/06/chinese-...
- seppel 6y ago
  > as well as a majority of restaurants and bars until prb early 2021. The majority of bars and restaurants are back open in Germany.
  - AnssiH 6y ago
    Yeah, they are open in Finland as well (https://valtioneuvosto.fi/en/information-on-coronavirus/current-restrictions https://valtioneuvosto.fi/en/information-on-coronavirus/curr...). Though I think the parent was talking about worldwide numbers which I have no idea about.
11235813213455 6y ago
Fantastic news for the environment and ourselves if people overall consume less
- josho 6y ago
  Are you seeing that people are taking that message to heart? Those around me don’t seem to be changing their attitudes. So, I don’t see any reason why things will change long term.
  - toomuchtodo 6y ago
    > Are you seeing that people are taking that message to heart? Those around me don’t seem to be changing their attitudes. Lots of aircraft still parked (~15k).
totally_a_human 6y ago
I'm german and I remember people being pessimistic naysayers in the banking crash 2008, the "refugee crisis" in 2015, the "climate crisis" last year and many times before that. Apparantly a year without a near end of the world is a wasted one. The single most appropriate quote in these times (it comes from 4chan of all damn places) is, and always will be: "Your impending sense of doom is nothing but emotional residue - there is nothing wrong. Even when something is wrong, nothing is wrong. You deal with problems as they arise, no big deal."
- kiliantics 6y ago
  This is the kind of attitude that causes the worst kinds of things to happen though. With no resistance, the people who want to take advantage of a situation will do so. This is what causes wars, this is why climate change will be our destruction.
- glouwbug 6y ago
  Good post. I needed that. Thanks
- fulafel 6y ago
  There's one crisis in this set that's real and we're doing way too little about it (climate crisis). Probably the biggest harm from short term panickng about these smaller things is taking away attention from it.
  - totally_a_human 6y ago
    Exactly! Short-term panicking is the worst thing to do. I definitely think the climate change is man-made. I also think it is impossible to realy predict its environmental, ecological and social consequences on a global scale. By listening to those, who try to nudge us into panic mode, we neglect calm long-term strategies that would improve our lives over time. Imho, this applies to every "immediate threats" that are regulary propagated by (social) media.
Darmody 6y ago
I don't even want to know how hard Spain will be hit. The country was kind of recovering from the 2008 crisis which was not pretty. Unemployment was still high before Covid, around 14% down from 26% which was not a good number but things were going forward. Now this new crisis will be 5 times worse, at least in terms of GDP. In 2008 the GDP went down around 2,5% now it'll go down more than 12%. Madness. Around 50.000 small businesses have already shut down and thousands more are barely surviving. And now the government is going to increase some taxes. Taxes which were supposed to affect the rich but guess what, they won't. I'm pretty concerned about several people I know with small/family businesses.

84 points by LinuxBender 6y ago

parsimo2010 6y ago

I'm not really that interested in the article, but thank you OP for linking to the lite version of CNN. It loaded so fast and didn't have any autoplaying videos. But related to the article- We have multiple continents that are significantly curtailing their output due to the pandemic, and it will last for a while yet. I'm a little surprised to see that they think Europe will contract by only 8.3%. That might make sense if it were just Europe being affected by the pandemic but all of their trading partners are affected too. I don't think they've accounted for how the entire world going down at once is going to effect the EU as a multiplicative effect, not an additive effect.

simonh 6y ago
It's a reasonable concern, but a look at the report indicates they seem to have attempted to take into account the effects on the EU's main global trading partners. You can get the report here. https://ec.europa.eu/info/business-economy-euro/economic-performance-and-forecasts/economic-forecasts/summer-2020-economic-forecast-deeper-recession-wider-divergences_en https://ec.europa.eu/info/business-economy-euro/economic-per...
- parsimo2010 6y ago
  The report claims that their economy will take a 17% hit in the first half of 2020 (it has already taken this hit, but it takes a while for the accounting to shake out). And they're claiming that the yearly hit will only be 8.3%. I understand that they are trying to take a lot of things into account, but this forecast is too optimistic. Europe won't bounce back that much in H2, because their recovery will only happen at the pace of everyone else's recovery.
  - simonh 6y ago
    I agree it's optimistic, it assumes no second wave which is actually already happening and is sure to happen elsewhere in the world too.
    - WinstonSmith84 6y ago
      Nothing proves that a "real" second wave will come with a similar lockdown to the first one. The first lockdown was catastrophic for the economy of some countries and didn't really help anything at all in regard to the health (best example is France/Spain vs. Germany). It seems (some) countries have learnt the lessons and now apply successfully limited restrictions (masks, social distancing, limited gathering, etc.) and this shall be the sweet spot for limiting contamination while not impeding further the economy. Arguably one shall not, again, underestimate governments for self-sabotaging themselves, but we can hope to see more reasonable measures being undertaken.
      - autokad 6y ago
        > "Nothing proves that a "real" second wave will come with a similar lockdown to the first one." I dont know about similar lockdowns, but its reasonable to be concerned about a 2nd winter wave. We seen what happens once winter time comes in Brazil
        mercer 6y ago
        Let's hope Covid took Bolsonaro by then and his replacement isn't somehow worse...
      - sveme 6y ago
        > didn't really help anything at all in regard to the health (best example is France/Spain vs. Germany) I believe France and Spain were simply already much further on the wave than Germany when they enacted the lockdown. Without the lockdown, things would have probably been much worse.
      - simonh 6y ago
082349872349872 6y ago
Our government has explicitly said we won't have any hope of returning to our economic status quo ante until such time as the rest of the world is ready to import our exports. So I selfishly ask you all to wash your hands and keep your distances, please.
- credit_guy 6y ago
  Same here. And I don't even care that much if you wash your hands, as long as you wear a mask in all indoor places that are not your home.
  - Johnjonjoan 6y ago
    Hand washing is a must. German studies have found people infected each other passing salt shakers and lighters. Whilst we can't tell what vector the virus took, the lighter incident happened outside AFAIK, so likely it was from hand contact.
    - credit_guy 6y ago
      It doesn't hurt, of course, but focusing on that may lead people into thinking face coverings are less important. They are by far more important. "We conclude that wearing of face masks in public corresponds to the most effective means to prevent interhuman transmission" [1] https://www.pnas.org/content/117/26/14857 https://www.pnas.org/content/117/26/14857

Proven 6y ago

Deeper than expected by the clueless (or lying) idiots who run the ECB and other government organizations in charge of making fake predictions for the betterment of the populace. We've been hearing "worse than expected" for over a decade now. CNN still doesn't get it. Or maybe they simply knowingly spread these obviously fake news.

orwin 6y ago

Growth expected to return by 2022 then? European oil providers supplies were supposed to be contracting by 2028 according to data from Rystad, before the pandemic, mostly because of below ground issues (and with very, VERY optimistic previsions concerning above ground issues imo). So anyway, Covid or not, European industrial production will peak this decade. Times will be harder and harder for a lot of people.

abyssin 6y ago
A bad economy is good for the climate, which is good for the economy.
- throwaway_pdp09 6y ago
  And that's what an optimist looks like.
- ars 6y ago
  I'm bad economy means no money for environmental projects. It's not a good thing.
- Ghjklov 6y ago
  Bad economy might lead to wars and conflicts. But if it kills a lot of people, I guess that's good for the climate in the long game. Wars are also great for the economy assuming you survive. Wow, the outlook for the next decade is fantastic.
  - abyssin 6y ago
    I personally can hardly handle thinking about the future without taking the possibility of conflicts caused by the climate mess into account.
    - mercer 6y ago
      I don't know your age, but I've been rather worried about the fact that almost all my < 30 years old friends seem to be some degree of 'doomer'. Whether it's climate, the economy (and the prospects of retirement), or even just expectations if what their next few decades will be like. Obviously I don't just worry that they feel this way, but also that they probably have a good reason for feeling this way, but either way it's worrying.

gavribirnbaum 6y ago

8.3% cause everything is fine and Covid will be gone next week... right?

mercer 6y ago
that comment is even more useless than this one.

WhompingWindows 6y ago

COVID is the massive elephant in the room that this article doesn't fully address. Everyone is very focused on GDP, but this is merely a single metric. What about new cases, patients hospitalized, patients dying from COVID? These have dramatic repercussions for economic policy, and it seems the countries doing the best right now economically are those who handle COVID the best.

wnmurphy 6y ago
Global warming is the same issue. We don't seem to realize that the economy kinda sorta depends entirely on the environment, just like the economy kinda sorta depends entirely on public health.

pjmlp 6y ago

Looking to many people that I know that I quite obvious. Plenty of people are still not able to work, and it is not like everyone can work from home.

war1025 6y ago

A thing I've thought is really interesting on how the news is covering Coronavirus here in the US is they like to talk about all the economic harm going on in the US and then they blame it on the government response rather than the pandemic itself. I've heard more than one news piece where they imply that Europe and Asia will be somehow spared from the economic fallout of putting their countries on lockdown for months on end. Then in the next piece they'll talk about how the US unemployment rate is off the charts and find a way to blame the Trump administration for it. The economy is suffering because we slammed on the brakes in what (at least at the time) seemed like a prudent measure to avoid a worse fate. Now we have to pay the price for that. Choices have consequences.

funcDropShadow 6y ago
Well, a country will have less economic fallout if it manages to keep SARS-Cov-II at bay. Trump managed to evoke the collateral damage of a lockdown without the full benefits. And that is on the government.
- war1025 6y ago
  > Trump managed to evoke the collateral damage of a lockdown without the full benefits. Besides the fact that the Federal government doesn't actually have the authority to invoke a lockdown, and it was done on a state by state basis, yes the Federal government did advocate for it. As to the benefits of the lockdowns as performed in various countries, I think it really remains to be seen how badly the US will be affected vs the rest of the world. As of right now, yes, the US looks particularly bad in terms of the number of infections / deaths. But it's also an area the size of Europe with the vast majority of the deaths restricted to New England. I wonder how things would look if you compared individual states to European countries. For example, here in Iowa, we're at I think 700 deaths and 30,000 confirmed cases. That doesn't seem too catastrophic to me.
  - Symbiote 6y ago
    You can make your comparison with these two pages: - https://www.worldometers.info/coronavirus/ https://www.worldometers.info/coronavirus/ ("Europe" is all Europe, not just the European Union. That's 747 million people.) - https://www.worldometers.info/coronavirus/country/us/ https://www.worldometers.info/coronavirus/country/us/ In that case, Iowa is doing very badly for cases/1M. I don't know if the comparison is fair, it might depend on who is tested. For deaths/1M, it's somewhere around the European average. Some European countries are very densely populated, like Belgium, the Netherlands, others less. Though much of Europe is as dense as New England.

subsubzero 6y ago

This pandemic will be alot worse in economic terms than predicted. So far the only bright spot will be deaths seem to have really dropped, but death is a low bar compared to having severe chronic symptoms after infection. Alot of people have really shut down spending(my family reduced it by 50%) Expect international travel/tourism to be completely shutdown as well as a majority of restaurants and bars until prb early 2021. Sports and concerts also. That is a considerable chunk of the economy. Will a majority of these restaurants even exist next year? A few assumptions that have been proven wrong with covid-19: 1. The virus will subside in the summer like the flu does. Based on cases in the US and other areas (sans Europe) skyrocketing right now this is absolutely not true, forget a 2nd wave we have a growing mountain of a 1st wave hitting the US/Americas now. 2. Children are not really affected by covid. Israel had to shut its schools down after cases there were jumping, in addition kawasaki disease seems to be prevalent in a higher percentage of infected children than normally seen. 3. Antibodies will offer protection against covid-19 after being infected. This too has been disproved although the jury is not out yet. Studies have seen neutralizing antibodies stay in a persons system for about 2-3 months. There are other ways the body knows how to fight an infection so this is not definitive yet.[3] [1] - https://www.washingtonpost.com/nation/2020/07/07/coronavirus-live-updates-us/ https://www.washingtonpost.com/nation/2020/07/07/coronavirus... [2] - https://www.npr.org/sections/coronavirus-live-updates/2020/06/03/868507524/israel-orders-schools-to-close-when-covid-19-cases-are-discovered https://www.npr.org/sections/coronavirus-live-updates/2020/0... [3] - https://www.cidrap.umn.edu/news-perspective/2020/06/chinese-study-antibodies-covid-19-patients-fade-quickly https://www.cidrap.umn.edu/news-perspective/2020/06/chinese-...

seppel 6y ago
> as well as a majority of restaurants and bars until prb early 2021. The majority of bars and restaurants are back open in Germany.
- AnssiH 6y ago
  Yeah, they are open in Finland as well (https://valtioneuvosto.fi/en/information-on-coronavirus/current-restrictions https://valtioneuvosto.fi/en/information-on-coronavirus/curr...). Though I think the parent was talking about worldwide numbers which I have no idea about.

11235813213455 6y ago

Fantastic news for the environment and ourselves if people overall consume less

josho 6y ago
Are you seeing that people are taking that message to heart? Those around me don’t seem to be changing their attitudes. So, I don’t see any reason why things will change long term.
- toomuchtodo 6y ago
  > Are you seeing that people are taking that message to heart? Those around me don’t seem to be changing their attitudes. Lots of aircraft still parked (~15k).

totally_a_human 6y ago

I'm german and I remember people being pessimistic naysayers in the banking crash 2008, the "refugee crisis" in 2015, the "climate crisis" last year and many times before that. Apparantly a year without a near end of the world is a wasted one. The single most appropriate quote in these times (it comes from 4chan of all damn places) is, and always will be: "Your impending sense of doom is nothing but emotional residue - there is nothing wrong. Even when something is wrong, nothing is wrong. You deal with problems as they arise, no big deal."

kiliantics 6y ago
This is the kind of attitude that causes the worst kinds of things to happen though. With no resistance, the people who want to take advantage of a situation will do so. This is what causes wars, this is why climate change will be our destruction.
glouwbug 6y ago
Good post. I needed that. Thanks
fulafel 6y ago
There's one crisis in this set that's real and we're doing way too little about it (climate crisis). Probably the biggest harm from short term panickng about these smaller things is taking away attention from it.
- totally_a_human 6y ago
  Exactly! Short-term panicking is the worst thing to do. I definitely think the climate change is man-made. I also think it is impossible to realy predict its environmental, ecological and social consequences on a global scale. By listening to those, who try to nudge us into panic mode, we neglect calm long-term strategies that would improve our lives over time. Imho, this applies to every "immediate threats" that are regulary propagated by (social) media.

Darmody 6y ago

I don't even want to know how hard Spain will be hit. The country was kind of recovering from the 2008 crisis which was not pretty. Unemployment was still high before Covid, around 14% down from 26% which was not a good number but things were going forward. Now this new crisis will be 5 times worse, at least in terms of GDP. In 2008 the GDP went down around 2,5% now it'll go down more than 12%. Madness. Around 50.000 small businesses have already shut down and thousands more are barely surviving. And now the government is going to increase some taxes. Taxes which were supposed to affect the rich but guess what, they won't. I'm pretty concerned about several people I know with small/family businesses.