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Record contraction in the eurozone economy

The Eurozone, home to Europe’s largest economies such as Germany, France and Italy, closed 2020 with an economic contraction of 6.8 percent over the previous year. According to the European Statistics Office (Eurostat), the Eurozone’s GDP in the last quarter of 2020 decreased by 0.7 percent compared to the previous quarter, and by 5.1 percent compared to the same quarter of the previous year. il

The agency said that its economy contracted the most in the last quarter with 4.3 percent in the last quarter, followed by Italy with a decrease of 2.0 percent and France with a decrease of 1.3 percent. Explaining that there was a slight economic recovery in the last quarter of 2020 in many Eurozone countries, including Germany, experts from the European Statistics Office, however, stressed that growth rates in all countries decreased compared to 2019. Growth of 12.4 percent in the third quarter did not change the overall trend.

The information disclosed by the agency is based on temporary initial estimates.

The impact is heavy compared to other major economies

Growth data show that the eurozone economy is hit harder by the corona pandemic than other major economies in the world. The US economy shrank 3.5 percent in 2020 from the previous year, the contraction in the Russian economy remained at 3.1 percent, and the Chinese economy grew by 2.3 percent.

The 6.8 percent economic contraction is also a record in Eurozone history. The biggest decline in the eurozone’s gross domestic product was recorded in 2009, when the financial crisis hit 4.5 percent.

Unemployment has also risen

According to Eurostat, in December 2020, there was no change in unemployment figures in the Eurozone. Unemployment remained at 8.3 percent, an increase of 0.9 percent over the same month last year. Measures to combat the corona pandemic are said to be effective in increasing unemployment.

The Eurozone, consisting of 19 European Union (EU) member states, was established in 1999.

Source: Reuters

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