Coronavirus
will hit the EU economy, Commission says
The extent
of the impact isn’t clear yet, however.
By BJARKE
SMITH-MEYER 2/26/20, 2:11 PM CET Updated 2/26/20, 5:06 PM CET
China's
coronavirus outbreak will affect the EU economy — it just isn't clear by how
much.
Such was
the warning from Commission economic chief Paolo Gentiloni after he unveiled
Wednesday's European Semester, a regular health check on the bloc's national
economies.
“It will
have an effect," he said at a press conference Wednesday, "knowing
that China accounts for 18 percent of global GDP, but an assessment and serious
forecast is not yet possible.”
A new
economic forecast from the European Commission is set to arrive in May, and
could revise growth down as the deadly virus continues to spread.
Coronavirus
hit Italy harder than any other EU country, with some 10 dead and 300 infected
since the weekend.
The
outbreak impacted several parts of the EU’s economy, Executive Vice President
Valdis Dombrovskis said at the same press conference.
The Latvian
noted reductions in air travel, tourism and falling demand thanks to the virus’
disruption of supply chains to China and across the bloc.
There will
be more data to draw on in May, Dombrovskis added, in response to worsening
conditions. “That’ll also be the occasion to discuss, among other things, a
fiscal expansion."
Italy might
also gain some fiscal relief to counter coronavirus' economic impact on its
industrial northern powerhouse.
Asked if
Italy would be granted any leniency from the EU's deficit rules, Gentiloni said
there are "clauses that exist for flexibility tied to exceptional
circumstances — I think there's a partial reply there."
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