COVID-19: this is the path for Europe’s financial recovery
- Last year’s recession has failed to inflict any significant damage on average household and corporate balance sheets in Europe.
- This is due to factors such as people staying at home and spending less, in addition to the support given to businesses and households, which reinforced financial stability.
- Europe’s public sector has borne most of the financial losses of COVID-19, due to the extensive support schemes it offered.
- For the strongest recovery, policy support and interventions must continue for those most affected, in a ‘gradual and cautious’ approach, advises the IMF.
One of the positive surprises about last year’s recession is how little damage it inflicted on average household and corporate balance sheets in Europe.
In the past, deep recessions were followed by protracted weakness as they left households and businesses…