These extraordinary figures do not actually say much about the good or bad economic health of the area. They only indicate the severity of the lockdowns. The more closed the economy, the more the GDP collapses, it’s mechanical.
Throughout the year 2020, the gross domestic product (GDP) fell by 6.8% in the eurozone, according to data published by Eurostat on Tuesday, 2nd. In comparison, the 2009 recession saw GDP decline by about 3.7%.
These statistics hide a rollercoaster year: a dramatic drop in the second quarter (–11.7%), an equally dramatic rebound in the third quarter (+12.4%), and a slight relapse in the fourth quarter (–0.7%).
To cope, the governments of wealthy countries decided to keep economies on life support by unlocking unprecedented support plans. The IMF calculated that global public intervention amounted to $14 trillion (€11.6 trillion) in 2020.
This intervention results in historic deficits. For the entire G20, these reach 13% of GDP; in the United States, 17.5%; in the eurozone, 8.4%. The 3% limit within the European Union seems distant…
