Coronavirus will hit the EU economy, Commission says
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.”