Eurozone’s record retraction confirmed, raising pressure on policymakers

EU statistics confirmed the eurozone economy’s record contraction of 3.8 percent for the first three months of the year compared to the previous quarter.

Eurostat’s flash estimate of seasonally adjusted gross domestic product today is unchanged from its initial finding two weeks ago, cementing the sharpest decline since the time series started 25 years ago.

Employment in both the eurozone and the EU decreased by 0.2 percent in the first quarter of 2020, compared with the previous one, the statistical office also said.

The figures will put more pressure on the European Commission to come up with its overdue recovery plan to kick start the EU economy once governments ease their lockdowns.

EU ambassadors today signed off on a temporary €100 billion unemployment reinsurance plan, which can support public programs that compensate employees for lost income if companies reducing working hours.

That’s part of a €540 billion aid package for workers, companies and governments.

Another element of the package will get a rubber stamp from finance ministers later today, allowing the eurozone’s bailout arm to offer governments credit lines worth €240 billion.

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