Record economic slumps hit Europe in face of resurgent virus

AFP
August 01, 2020

Paris: Nation after nation across Europe on Friday unveiled the extent of historic economic devastation as resurgent coronavirus cases forced agonising new trade-offs between lives and financial...

Share Next Story >>>

Paris: Nation after nation across Europe on Friday unveiled the extent of historic economic devastation as resurgent coronavirus cases forced agonising new trade-offs between lives and financial health.

Six months after the World Health Organization (WHO) declared a global emergency, the novel coronavirus has infected more than 17 million people and wreaked global economic mayhem. France´s economy contracted by a record 13.8 percent in the second quarter, Spain went into recession after its gross domestic product slumped 18.5 percent, Portugal´s economy contracted 14.1 percent, and Italy´s GDP plunged 12.4 percent.

Europe as a whole was hammered by its sharpest recorded contraction in the second quarter, with GDP down 12.1 percent in the eurozone and 11.9 percent across the Union bloc. "It is a shocking drop, but completely understandable as the economy was shut for a considerable period during the quarter," said Bert Colijn, senior economist at ING Bank.

Airline conglomerate IAG, the owner of British Airways, on Friday posted a first-half net loss of 3.8 billion euros ($4.5 billion), UK bank NatWest slid into the red while Dutch airline KLM and truck makers Scania said they were each shedding 5,000 jobs.

Britain on Friday enforced new lockdown rules in Manchester and nearby parts of northern England in an ill-timed announcement on the eve of the Muslim Eid-al-Adha festival. Under the measures, people from different households in the affected areas are banned from meeting indoors. They apply to some four million people across Greater Manchester and parts of the counties of Lancashire and Yorkshire -- areas which have a sizeable Muslim population.

"We take this action with a heavy heart, but we can see increasing rates of COVID across Europe and are determined to do whatever is necessary to keep people safe," British Health Secretary Matt Hancock said on Twitter.

The sacred hajj pilgrimage in Saudi Arabia has been held with some 10,000 Muslim faithful allowed, instead of the roughly 2.5 million that attended last year. Pilgrims were brought in small batches into Mecca´s Grand Mosque, walking along paths marked on the floor, in sharp contrast to the normal sea of humanity that swirls inside its walls.

The UN health agency´s emergency committee was to meet for a fourth time Friday to assess the raging pandemic and its status as a public health emergency of international concern (PHEIC) -- WHO´s highest level of alarm.

World Health Organization chief Tedros Adhanom Ghebreyesus has defended the agency´s response saying it had declared a top-level public health emergency on January 30,when there were fewer than 100 cases and no deaths outside China, where the virus first emerged.

"Spikes of cases in some countries are being driven in part by younger people letting down their guard during the northern hemisphere summer," said Tedros. Amid the race to find a medical solution, Japan has signed a deal to secure 120 million doses of a potential coronavirus vaccine, said German pharmaceutical group BioNTech, which is developing the drug with US pharma giant Pfizer.

Financial details of the deal were not disclosed, with BioNTech saying the terms were based on the timing of the delivery and volume of doses. But an agreement announced recently between the labs and the United States put the price of 100 million doses of the potential vaccine at almost $2 billion.

The United States -- the world´s hardest-hit nation and its biggest economy -- posted a second-quarter loss of 9.5 percent compared with the same period a year ago, the worst figure on record.

If that trajectory carried through the entire year, its economy would collapse by nearly a third (32.9 percent), the data showed. Historic contractions have been additionally recorded in Germany (10.1 percent), Belgium (12.2 percent), Austria (10.7 percent) and Mexico (17 percent).

Global daily cases are now approaching the 300,000 mark, with the curve showing no sign of flattening -- it took just 100 hours for one million new cases to be recorded. Vietnam recorded its first coronavirus death on Friday as the pandemic rebounds in a country that had previously been praised for stubbing out the contagion.

Hong Kong said it would delay local elections planned for September because of a virus surge. In Japan, Tokyo´s governor called for restaurants, bars and karaoke parlours to shut earlier as the capital reported a record number of new infections.

Sweden, whose controversial softer approach to curbing coronavirus has received worldwide attention, said it would encourage people to keep working from home into next year where possible, as the country passed 80,000 recorded cases.



More From Business