Evaluating the prospects of the economic recovery in the EU, the ECB considers the coronavirus resurgence to be the only obstacle on the thorny path. The European financial watchdog has reasons for such concerns as the vaccination campaign is going on at a slower-than-expected pace.
ECB President Christine Lagarde called on the authorities of all 27 EU countries to speed up mass vaccination and do not give up with financial aid. In turn, the regulator confirmed its commitment to inject regular stimulus into the financial system to support the recovery of the crisis-stricken EU economy. “The winter surge in COVID-19 cases, the mutations in the virus and the strict containment measures are a significant downside risk to the euro area economy,” the ECB head commented on further steps in fiscal stimulus.
According to the central bank’s forecasts, the EU economy will get back on track to the pre-crisis levels not until mid-2022. The regulator hopes to see the green shoots of recovery by the middle of this year. However, lingering uncertainty, new mutant coronavirus strains, and other economic shocks could make a dent in such forecasts.
The doom and gloom among EU businesses pushed the composite PMI to 47.5 points in January, the lowest level in two months. Poor morale among European entrepreneurs comes as a result of tightening restrictions in some European countries on the back of the COVID-19 resurgence in the winter. Citing Chris Williamson, a chief business economist at IHS Markit, a double-dip recession in the eurozone is 'increasingly inevitable'.