It is not a secret that top economies are struggling to cope with the economic impact of the coronavirus pandemic. The euro zone contracted by 3.8% in the first quarter of 2020 compared with the last three months of 2019.
According to the European statistics office, the preliminary reading is at the lowest since records began in 1995. Moreover, this result surpassed expectations.
The euro zone consists of 19 members, which shares the single currency. Unfortunately, the euro zone is one of the hardest hit by coronavirus pandemic. The largest economies of the euro area, such as Germany, France, Italy, and Spain are among the top six countries worldwide when it comes to the highest number of infections.
As a result, of strict lockdown measures, all-non essential services have been closed for a couple of weeks. Italy which has one of the largest economies in Europe was the first country to introduce a nationwide lockdown starting from March 10. Consequently, the second-quarter will be even more difficult not only for Italy but the euro zone in general.
The French economy and coronavirus pandemic
Italy is not alone as can be seen from the information stated above, countries across Europe are trying to cope with problems. In the first quarter of 2020, the Frech economy contracted by 5.8% compared with the same period in 2019. Moreover, this was the sharpest decline since records began decades ago since 1949.
The euro zone’s second-largest economy fell 01.% in the last quarter of 2019. As a reminder, the recession is defined as two consecutive quarters of economic contraction. As a result, the French economy entered a technical recession.
The country made the decision to lift some of its lockdown measures from May 11. However, France will face much bigger economic challenges than the euro zone’s largest economy Germany.
Nevertheless, the coronavirus pandemic is a serious challenge even for the economic powerhouse. For example, German retail sales dropped at the fastest rate in March since January 2007. According to the country’s statistics office, monthly retail sales decreased by 5.6% in March.
Moreover, based on the information provided by the government, the country is on track for the worst recession since World War Two.
The euro zone’s other major economy Spain is also under pressure due to the coronavirus pandemic. For example, the Spanish economy contracted 5.2% in the first quarter of 2020.
Also, the unemployment rate continues to rise, and this another issue. According to the Eurostat, the unemployment rate in March increased by 0.1% compared with February and reached 7.4%.