Recession expected in many EU member states due to Covid-19 this year - Dombrovskis

  • 2020-03-18
  • LETA/TBT Staff

RIGA - Due to the restrictive measures introduced due to the spread of Covid-19, many EU economies are expected to fall into a recession this year, European Commission Vice-President Valdis Dombrovskis (New Unity) said in an interview with Latvian Television on Wednesday. 

"It is clear that there will be problems. They will be quite serious. We see that, most likely, there will be a recession in many EU member states," Dombrovskis said.

He added that for the time being it is not possible to make any accurate forecasts because the situation will depend on how successfully the coronavirus pandemic is tackled. "If the current measures prove successful and help curb the spread of the virus, the economy will be able to recover relatively quickly," Dombrovskis said.

The EU commissioner also stressed the necessity to support businesses in these times of hardship.

"In this situation it is essential to ensure to curb layoffs whenever possible and alleviate companies' problems so that they are not forced to quit their business, which would weaken the economy's potential," Dombrovskis said. 

He indicated that the stabilization expenditure member states will allocate for healthcare, businesses and social support will not be considered violations of the EU's fiscal rules.

"So member states have the opportunity to allocate all the necessary resources to support their businesses," Dombrovskis said, adding that this also applies to airlines. 

It has been proposed to allow member states to use disbursed advance payments and unused EU funding for tackling the problems caused by Covid-19, Dombrovskis said.