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IMF adopts secure deep recession in Europe in 2020 because of COVID-19

The International Monetary Fund (IMF) said today that the onset of a deep recession on the European continent in 2020 seems certain due to the severe economic consequences of the coronavirus pandemic, France Press reported.
“In major European economies, secondary goods and services businesses closed by government decrees account for about a third of production,” IMF Director for Europe Paul Thomsen explains in a blog.

"This means that every month these businesses remain closed, there will be a 3% drop in annual GDP,” he adds.

The expert highlights the cruelty with which Covid-19 hit Europe, reports BTA.

In particular, for the euro area, Thomsen is of the opinion that the determination with which its leaders have done what is necessary to stabilise the euro should not be underestimated at a time when criticism is being made for European countries' inability to show solidarity against the crisis.

It defines as particularly important the large-scale intervention of the European Central Bank and the call of European leaders to include the European Stabilisation Mechanism as an addition to national budgetary measures. According to him, this will ensure that countries with high sovereign debt such as Italy, which has been particularly affected by the epidemic, have the necessary scope for manoeuvre in the budgetary sphere to respond vigorously to the crisis.

A major concern for the IMF at this stage is rather small countries outside the EU, Thomsen notes.

"With the exception of Russia and Turkey, most of the nine emerging market economies in Central and Eastern Europe that are not members of the EU have requested urgent assistance through the IMF's financial support mechanisms,” among over 70 other member states of the fund around the world, Paul Thomsen said.

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