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Published on Monday, September 21, 2020

Europe | Will the NGEU help end the crisis?

We knew that things in Europe might not be easy after the summer given the risk of a second wave of the pandemic. But the new outbreaks—which everyone knew were coming—may have arrived earlier than expected.

Key points

  • Key points:
  • In the second half of August, the European economic indicators, which improved substantially between May and July, began to reflect these fears.
  • Confidence indices have fallen and some consumer expenditure has stagnated.
  • The impact is greater in those countries where the new outbreaks of COVID-19 have come earlier than expected and the countries that rely most heavily on tourism. Countries that rely more on industrial exports, such as Germany, have been less severely affected.
  • Monetary policies and national fiscal policies have only a limited scope of further action.
  • Next Generation EU (NGEU) Recovery Plan, the guidelines for which were published last week, will be very substantial and key for the EU's strategic objectives (green, digital and social), but it will not be available in the very short term as a counter-cyclical policy.

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