Corona-implications for southern Europe: The Euro crisis comes back

The pandemic, the public economies of Greece, Italy and Spain particularly hard. The risk premiums for government loans to rise. to The tourists, now the squa

The pandemic, the public economies of Greece, Italy and Spain particularly hard. The risk premiums for government loans to rise.

to The tourists, now the square in front of the Athens Parliament building cleaning workers photo: ALKIS KONSTANTINIDIS/reuters

BERLIN taz | The Corona epidemic could belongs to reactivate a Problem, the almost forgotten railway: the Euro crisis. Because of the quarantine measures, the crisis countries of Italy, Spain and Greece particularly hard.

In Greece, it was not until Saturday, only 228 of the officially Ill and three deaths, but the public life was massively reduced. Schools and universities are closed, Restaurants, cafes, and shopping centers, museums, and archaeological sites as well. The Greek tourism Association is expecting "drastic" declines in hotel bookings.

Greece lives from tourism, which generates about a quarter of the country's annual economic output. The second most important industry, shipping contributes only about 7 percent to the gross domestic product. In addition, tourism is the only sector that is growing steadily and its export earnings, the trade deficit reduces. Now the tourism, warns the Association that most of the Hotels could not slip into Bankruptcy, if the state supports you.

Politically, it would be possible to pay Notsubventionen: EU Commission President Ursula von der Leyen has announced that the Corona-is considered epidemic "as a natural event" and the deficit rules for national budgets and until Further notice will no longer apply.

Greece's government debt amounted to 335 billion euros, equivalent to about 176 percent of annual economic output – a lone record in Europe. Tourism should collapse in fact, for months, would add billions more.

Greece could suddenly apply again as a broke country, the high risk has to pay premiums. The country had just liberated from this burden. At the beginning of February, Athens was able to celebrate a record: The Greek state had to pay for a ten-year loan just a percent interest. But now the risk premiums to rise again, although Greece has still taken no Corona debt.

Similar experienced Italy, which currently must pay for a ten-year state loan at 1.8 percent interest. For comparison: Germany pays minus 0.54%. The difference, mostly in English, "Spread" is called, is about 2.3 percentage points. This may seem little, but is in truth much, because interest can be paid only if they are higher than nominal growth.

growth is not recorded in Italy but. In 2019, it was zero, and the Corona epidemic is likely to lead to a massive recession, because public life is at a standstill. The Italian government has already announced that it wants to support its economy with a 25 billion Euro.

Since Sunday, the "national state of emergency also applies in Spain". People may leave their homes only to go to work or purchase food. It is expected that the rates will continue to rise for Spain.

so Far, the European's Central Bank of a targeted state to buy up the bonds of crisis-hit countries to push down interest rates. ECB Chief Christine Lagarde said on Thursday a little flippant, the Central Bank is "to close Spreads". Prompt shot, the risk premiums for Italy in the height. In the meantime, it is apparent that the ECB corrected its course. Spain's Central Bank chief, Pablo Hernandez de Cos, said: "If necessary, we would buy Italian government bonds and those of other countries in order to avoid fragmentation."

Date Of Update: 10 May 2022, 16:02

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