The total budget deficit of 19 eurozone countries will increase this year by a factor of 10 compared to the previous year and will reach €976 billion, or 8.9 percent of GDP, due to emergency measures to counter the crisis triggered by the new coronavirus pandemic. This was announced by the Financial Times on Monday.
According to the European Central Bank, the previous peak of the euro area deficit occurred in early 2010, when the figure rose to 6.6 percent of GDP. At that time, it caused concern among investors and sharpened the financial situation in the eurozone.
In the current situation, according to Marco Valle, one of the leading economists at UniCredit, “governments have no choice but to continue spending everything necessary to support the economy and reduce long-term damage.
As European Commissioner for Economic Affairs, Paolo Gentiloni said earlier, the eurozone recession caused by the pandemic poses a threat to the monetary union. The downturn is deeper than expected and the differences in economic development between the eurozone countries are becoming more significant, he said.