EU May Face Recession As Employment, Retail Numbers Stay Weak

The eurozone, facing high unemployment rates in an attempt to keep the pandemic contained, has economists convinced a double-dip economic recession is coming, the Financial Times (FT) reported.

Spain is facing five-year unemployment highs, FT reported, adding the country’s numbers rose 44,436 compared to the last month. For the first time in years, the country is seeing over 4 million jobless people at the same time.

Spanish unemployment, FT reported, is usually high, but it hasn’t been above 4 million since 2016, and the vast majority of workers who lost their jobs in February — around 37,000 — were from the service sector.

Meanwhile, Germany has been looking at retail sales falling for months in a row, with tight restrictions to keep a lid on the virus causing a 4.5 percent drop in the country’s retail sales in January, FT reported. A temporary sales tax cut also weighed on consumer spending, and it ended around the same time, making the numbers worse.

The fall in retail sales was worse than the projected 0.3 percent decline expected by economists in previous polls, FT reported. The numbers also follow even worse ones, including a 9.1 percent decline in December when Chancellor Angela Merkel’s government tightened restrictions at that time, closing down non-essential stores, retail and most leisure and entertainment venues.

The government in Berlin is planning to meet Wednesday (March 3) to discuss the options of easing lockdown measures, which are in force until at least March 7, according to FT.

The answer to Europe’s woes could be in vaccine distribution, which health ministers have been told to ramp up.

The EU is currently working on plans for vaccine passports that could help goad society back to something resembling normal by allowing those with proof of vaccinations to travel freely. Governments around the bloc have been pressured to help navigate an end to the pandemic and get a timetable in place to end the restrictions.