“The economic impact of the embargo is more severe than we initially expected,” Commissioner Valdis Dombrovskis said in a statement. “We are still moving around in storm water and facing many dangers, including another large wave of infections,” he added.
The expectations of the 19 countries that use the euro have also been reduced. A contraction of 8.7% is now expected in 2020, which is a full percentage point more than previous forecasts.
The committee said that “the size and duration of the epidemic, and possibly future closings, are still fundamentally unknown,” adding that the negative risks to its expectations are “exceptionally high.” Significant uncertainty also means that the economy may rebound more strongly than expected.
The spokesman said the museum has lost 40 million euros ($ 45 million) in revenue since it closed in March, and it is expected that its maximum daily capacity during the summer will be 10,000, or less than a quarter of the usual number.
European Union Recovery Fund
The relief package will come on top of 540 billion euros ($ 592 billion) in the current EU stimulus efforts, as well as aid packages for countries, and it will be a welcome relief to countries like Spain, Italy, Portugal and Greece, which are more dependent on tourism and have been particularly affected by Repercussions of coronavirus.
According to the commission, which the recovery fund can help improve expectations for the region, which said its forecasts did not take into account the proposed package because it had not yet been approved by member states. EU leaders can craft an agreement when they meet on July 17 and July 18.
Dombrovskis said the new forecasts provided a “strong example” of the need for an agreement on relief measures.
According to the commission, the decline in output and strength of recovery “are to be markedly different” between countries. She said there are “significant risks” that the cash flow difficulties “turn into favorable problems” for many companies and that the labor market suffers from long-term damage.
Italy, which has suffered the highest number of coronavirus deaths in Europe, is expected to drop 11.2% this year, the worst drop in the region. The commission said that the country’s gross domestic product is not expected to return to last year’s level before 2022. The economies of France and Spain will also contract by more than 10%.
Spanish Prime Minister Pedro Sanchez and his Portuguese counterpart Antonio Costa said on Monday that it is “essential” that European Union countries quickly reach an agreement.
“It is essential that the domestic market start operating again, which is important not only to countries most affected by the crisis, but also to countries that benefit most from the internal market, such as Germany … and the Netherlands.” Costa said.
– Julia Horowitz, Vasco Cotovio, Laura Perez Maestro, Pierre Perrin and Ivana Saric contributed to the reporting.