Lifting lockdowns may prove too early as businesses around the Eurozone drops after results from the IHS Markit Purchasing Managers’ Index came out.
With China stockpiling oil and focusing on employment measures despite their drop in GDP, it seems that the Eurozone is currently having its share of problems with their economy.
A figure below 50 in the PMI, measuring both the services industry and manufacturing, indicates a drop in overall economic growth.
Chris Williamson, a chief business economist at IHS Markit, said in a statement:
“April saw unprecedented damage to the euro zone economy amid virus lockdown measures coupled with slumping global demand and shortages of both staff and inputs.”
UK torn about easing lockdowns
Despite the majority of the countries wanting to lift lockdown measures, ministers in the UK are split with how to ease restrictions. While Prime Minister Boris Johnson is still recuperating, his senior ministers are currently taking the floor.
Chancellor Rishi Sunak, cabinet office minister Michael Gove, and trade secretary Liz Truss are among those raising concerns regarding the impact of a lengthy economic shutdown.
On the other side, education secretary Gavin Williamson and business secretary Alok Sharma think the situation in the UK is already under control but cautions to ease lockdowns echoing the advice of the prime minister of another wave.
In addition, the World Health Organization (WHO) also warns the countries planning to lift lockdowns that the virus could “reignite.”
European Union pushes recovery plan despite differences
In order to support the other countries in this COVID-19 pandemic, the European Union (EU) recently agreed to a recovery plan on April 23, as per the Associated Press (AP).
European Council President Charles Michel told reporters after chairing the leaders’ video-conference summit:
“This pandemic is putting our societies under serious strain. The well-being of each EU member state depends on the well-being of the whole of the EU. We are all in this together.”
Although some of the Northern European leaders still disagree on some matters regarding how to rebuild the ravaged economies, they need to push this plan as soon as possible.
The leaders also agreed to task the European Commission (EC) with revamping the EU’s next seven-year budget. While no figure was put on that plan, officials believe that 1 – 1.5 trillion euros [AU$1.69-2.54 trillion] would be needed.
In addition, they also came into an agreement of a separate 540-billion-euro [AU$914 billion] rescue package drawn up by European finance ministers which would help pay lost wages, keep companies intact as well as fund health care systems starting June 1.
We will see if the Eurozone, along with the rest of the world, can make this solution work in order to prevent another great depression.