The eurozone economy contracted by 0.6 percent over the first
three months of the year, sliding back into recession, as the still-raging
pandemic prompted governments to extend lockdowns.
اضافة اعلان
Coming a day after the United States disclosed that its economy
expanded 1.6 percent over the same period, the European downturn presented a
contrast of fortunes on opposite sides of the Atlantic.
Propelled by dramatic public expenditures to stimulate growth,
as well as swift increases in vaccination rates, the United States — the world’s
largest economy — expanded rapidly during the first months of 2021. At the same
time, the 19 nations that share the euro currency were caught in the second
part of a so-called double-dip recession, reflecting far less aggressive
stimulus spending and a botched effort to secure vaccines.
But figures for gross domestic product represent a snapshot of
the past, and recent weeks have produced encouraging signs that Europe is on
the mend. The alarming spread of
COVID-19 in major economies like Germany and
France has begun to trend downward, factories have revived production, while
growing numbers of people are on the move in cities.
Even as the German economy diminished by 1.7 percent from January
to March, Italy and Spain slipped by much smaller magnitudes — 0.4 percent and
0.5 percent respectively. The French economy grew by a modest 0.4 percent,
though its prospects face a fresh challenge in the form of new pandemic
restrictions imposed in April by the government.
The initial lockdowns last year punished Europe’s economies,
bringing large swaths of commercial life to a halt. But the current
restrictions are calibrated to reflect improved understanding of how the virus
spreads. Rather than closing their doors altogether, restaurants in some
countries are serving meals on patios and dispensing takeout orders. Roofers,
carpenters and other skilled trades have resumed work, so long as they can stay
outside.
“We have sort of learned to live with the pandemic,” said
DhavalJoshi, chief strategist at BCA Research in London. “We are adapting to it.”
Vaccination rates are increasing throughout Europe, a trend
likely to be advanced by the European Union’s recent deal to secure doses from
Pfizer.
Most economists and the
European Central Bank expect the
eurozone to expand at a blistering pace over the rest of 2021, yielding growth
of more than 4 percent for the full year.
Still, even in the most hopeful scenario, Europe’s recovery is
running behind the United States, a reflection of their differing approaches to
economic trauma.
Since last year, the United States has unleashed additional
public spending worth 25 percent of its national economic output for
pandemic-related stimulus and relief programs, according to the International
Monetary Fund. That compares to 10 percent in Germany.
But Europe also began the crisis with far more comprehensive
social safety net programs. While the United States directed cash to those set
back by the pandemic, Europe limited a surge in unemployment.
“Europe has more insurance schemes,” said Kjersti Haugland,
chief economist at DNB Markets, an investment bank in Oslo. “You don’t fall as
hard, but you don’t rebound that sharply either.”
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