by Tyler Durden
The European Commission has released its Spring 2020 Economic Forecast which shows that COVID-19 is wreaking havoc on Europe's economy.
The collective GDP of the EU-27 was expected to grow 1.2 percent this year but it is now forecast contract 7.4 percent due to the pandemic. By contrast, Statista's Niall McCarthy notes that the Financial Crisis "only" led to a contraction of 4.5 percent for the EU-28 back in 2009.
The current crisis has now pushed the EU into the deepest recession since its foundation with unemployment rates set to rise drastically. Last year, unemployment across the bloc was 6.7 percent and it is now forecast to grow to 9 percent this year.
The data shows that no EU member state is going to emerge from the COVID-19 crisis unscathed with countries in southern Europe set to be worst impacted.
Even though Greece has made progress since the Financial Crisis and has earned plaudits for limiting the spread of the coronavirus, it is expected to suffer the worst decline in GDP our of all EU member states at 9.7 percent. Italy and Spain who have both been badly impacted by the pandemic are also expected to suffer GDP contractions greater than 9 percent this year.
Even though Germany has suffered a far lower death toll than many of its neighbors and is slowly easing its lockdown, Europe's economic powerhouse is still predicted to see its GDP shrink by 6.5 percent this year. While the situation remains serious in some parts of Europe, particularly the UK, there is light at the end of the tunnel.
After 7 weeks of strict confinement, Italians finally emerged from their homes at the start of the week while Germany's schools and restaurants are set to open over the next couple of days. Even though the situation is improving, most EU leaders are remaining cautious due to the possibility of a second wave of infections. The European Commission has stated that fundamental uncertainty surrounds the forecast and that the danger of a deeper and more protracted recession is very real.
Peter Nilsson, a professor of internal medicine and epidemiology at Lund University, warns that the economic devastation caused by lockdowns will cause more deaths than the coronavirus itself.
Nilsson was commenting on Sweden’s approach to coronavirus, which unlike virtually every other western country in the world didn’t impose a lockdown to fight COVID-19.
The tactic appears to have worked, with Sweden’s ‘R’ rate of infection being roughly the same as the UK’s, a country which did impose a lockdown. The country also now has much more widespread herd immunity and didn’t sacrifice its economy, meaning deaths from poverty will be reduced.
Opining that he thinks this will “prove to be a good strategy in the long run,” Professor Nilsson said the approach had succeeded in preventing a spike in unemployment.
“It’s so important to understand that the deaths of COVID-19 will be far less than the deaths caused by societal lockdown when the economy is ruined,” said Nilsson.“Why? Because of unemployment and all the social problems with it. A bad economy will hurt and kill people in the future.”
Mikael Rostila, professor at the Department of Public Health Sciences at the Stockholm University, echoed Nilsson’s sentiments in arguing that Sweden is now in a much better position than other countries.
“Sweden could reach heard immunity earlier than other countries which means that the spread of the virus and the number of deaths will decrease since a majority of the population will be immune,” said Rostila.
“Other countries that start to reopen now may experience a second wave of the virus. So it might be that they have just postponed a severe outbreak.”
As we previously highlighted, a data analyst consortium in South Africa found that the economic consequences of the country’s lockdown will lead to 29 times more people dying than the coronavirus itself.
German scientist, Professor Hendrik Streeck has been studying groups of subjects in his country and has reached a number of compelling provisional findings regarding the viral behaviour of the new Coronavirus.
He also presented data which gives an indication of an “Infected Fatality Rate” (IFR), eg. the percentage of people infected who will end up dying. New findings show a COVID-19 infection fatality rate of between 0.24 – 0.36% (as opposed to Neil Ferguson who claims the IFR to be just under 1%, perhaps 0.8-0.9%). Previous interviews with UnHerd, with experts like Johan Giesecke who believes the IFR is closer to 0.1%, or one in a thousand.
The difference between IFR is important, not least of all because this statistic will be used by governments to determine he relative severity of the threat in question. After UK ‘experts’ like Prof. Ferguson had massively overestimated the IFR, Boris Johnson’s government then switched course – away from a more common sense, science-based approach like Sweden, and instead implemented an experimental Medieval-style quarantine, or “lockdown” method, to try and contain the coronavirus. In the end, the UK policy turned out to be a disaster, leading to an unprecedented economic catastrophe as well as the highest COVID death totals in Europe.
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