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The economy of the euro zone is being brought down on its knees in a historic measure due to the ongoing coronavirus outbreak. In response to the coronavirus pandemic, the Olympic Games in Tokyo have been pushed forward for another year.
The coronavirus pandemic has not spared the giant euro-zone economy. According to a post by Bloomberg, the euro zone is sinking into the biggest economic crisis ever recorded in recent financial systems. As the authorities rush to implement precautionary measures meant to combat the novel coronavirus, businesses are left with no option other than closing their operations.
In addition, the IHS Markit’s measure of private sector activities recorded the lowest ever level since the creation of the index. This dates back more than two decades ago when the currency block was formed.
According to Bloomberg, services fared considerably poorer than the manufacturing sector, particularly tourism, travel, and restaurant businesses. As a result, the composite reading dropped from 51.6 to 31.4 in March only.
The chief business economist at IHS Markit, Chris Williamson, said:
“Business activity across the euro zone collapsed in March to an extent far exceeding that seen at the height of the global financial crisis. Business sentiment about the year ahead has plunged to the gloomiest on record, suggesting policymakers’ effort to date have failed to brighten the darkening picture.”
As a result of the market free fall and unpredictable future of the coronavirus pandemic, the European Central Bank announced that it will be injecting a whopping 750-billion-euros through an emergency bond-buying program. This is a similar move that the United States federal government is planning on doing to save the failing economy, but not until Congress passes the bill.
In addition, most euro governments have started stepping up on pledges paying off loans to shield their respective jurisdictions’ economy from falling further. The euro zone is on track for its largest failure in GDP since its inception.
Coronavirus Affects Not Only Euro Zone Economy but Also the Olympics
As the number of infected people by the novel coronavirus continues threatening the social fabric of the society. More and more strict measures to promote self-quarantine continue emerging from different countries. The sporting fraternity has been hit most as games get either canceled, played in closed doors or postponed for future dates.
In a bid to help control the spread of the COVID-19 virus, the Olympic Games in Tokyo has been postponed for one year. However, this point remains relevant if the virus either self-eradicates or a vaccine is approved sooner than the current pace.
With the unpredictable nature of the virus, more volatility ahead in the future will not be escaped. Hence the economy in the euro zone might see more dark days ahead.