The full extent of the impact of Covid-19 on the eurozone economy has been laid bare by figures showing the single currency zone shrank by a record 12.1% in the second quarter of 2020.
Amid growing fears that Europe’s tentative recovery is about to be affected by a second wave of the crisis, the European Union’s statistical arm, Eurostat, provided stark evidence of the drop in activity caused by the almost total lockdowns imposed by some countries in the spring.
Eurostat’s data revealed that the contraction in the second quarter – when combined with a smaller fall in the first three months of the year – had wiped out a decade and a half of expansion, returning the eurozone economy to its level in the mid-2000s. Italy – which has struggled to grow since adopting the single currency – has seen its GDP return to the levels of the mid-1990s.
In Spain, where concerns about a second wave are most acute, there has been the biggest drop in output in the second quarter, registering a decline in GDP of 18.5%. The fall, unmatched even during the Civil War of the 1930s, followed a contraction of 5.2% in the first quarter and means that the eurozone’s fourth biggest economy shrank by almost a quarter in the first half of 2020.