Some of the wealthiest countries in the world such as Germany, France are the members of the euro zone. However, the region is struggling to cope with the economic impact of the coronavirus pandemic. Governments of many European countries made the decision to introduce various measures to contain the virus. As a result, a lot of people across the region lost their jobs. Moreover, it won’t be easy to solve all of the problems created by the coronavirus pandemic.
Importantly, the unemployment rate in the euro zone rose to 7.4% in May. It is the worst result since November 2019. Based on the information provided by the European Statistics Office, the number means that 12.146 million people in the 19-member region were unemployed in May.
This result came after a number of European countries made the decision to take their first steps to reopen in May. Consequently, some of the workers were able to return to their jobs. Nevertheless, social-distancing measures and ongoing travel restrictions are limiting the pace of recovery.
Euro zone and coronavirus pandemic
Unfortunately, youth unemployment, those aged between 16 and 24, also increased in May. In May, the unemployment rate among young people reached 16% compared to April, the number of unemployed young people increased from 15.7% to 16.4%.
is is not the end of the story as some economists are expecting much worse unemployment figures in the future, as governments reduce benefit schemes. As a reminder, at the height of the sovereign debt crisis during the last decade, the unemployment rate reached more than 12%.
According to the European Central Bank (EB) President Christine Lagarde, the world maybe the past the worst part of the pandemic. However, she mentioned that there is a risk of a second wave of infections.
Interestingly, the ECB expects that the gross domestic product (GDP) of the euro zone would fall by 8.7% in 2020. Hopefully. The central bank is more optimistic when it comes to next year’s GDP. According to the central bank, the euro zone would grow by 5.2% in 2021.