EU double recession warning: Bloc poised for second crash AFTER coronavirus crisis

As Europe is the epicentre of the coronavirus outbreak, countries across the EU have gone into lockdown – including some of the bloc’s biggest economies. This has brought economic activity to a halt and provoked drastic measures from the European Central Bank as it bids to save the euro. President of the ECB – Christine Lagarde – launched a huge bond-buying programme earlier this month worth £680billion as she looked to stimulate the European economy.

But Professor Iain Begg tells Express.co.uk that the move, if done without necessary caution, could lead to a second economic crisis.

He said: “It is a return to a practice the Fed, the Bank of England and later the European Central Bank used to deal with the financial crisis.

“It is simply a monetary instrument being used to stimulate the economy. With interest rates so low, the ECB has no other option but to pump money into the economy.

“The danger is if you pump too much money in, two thousand years of history tells us that leads to inflation.

“But inflation in the short term is not the problem, we may not even need to worry about it for quite some time.

“There is some view is that if you have a monetary stimulus on this scale, it diminishes the profitability of banks because they can’t charge as much interest and that in turn undermines their safety.

“Therefore there is risk of a financial crisis as a response to the previous financial crisis – in this case the coronavirus pandemic.

“But that’s speculation rather than certainty.”

The UK has dealt a similar response to the coronavirus crisis, pumping upwards of £600billion into the economy while also dropping interest rates to just 0.1percent.

The Bank of England warned: “The spread of COVID-19 and the measures being taken to contain the virus will result in an economic shock that could be sharp and large, but should be temporary.”

However, Professor Begg also highlights how the EU has become divided as a result of the ECB’s measures, as German banks feel they may be forced to share damage with Southern Europe as happened in 2008.

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The economist added: “In political terms there has been a strong resistance, especially from Germany and some of the other creditor countries inside the eurozone to this action by the European Central Bank.

“It was very much seen in the days of Mario Draghi (former President of the ECB) as something he was doing as it suited Italy, and was against the German ethos of having monetary stability.

“So you might see that kind of objection resurfacing not immediately, but a few months down the line you could see opposition to what Christine Lagarde did from German sources.”

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Coronavirus heartbreak: Infected doctor, 59, dies alone in self-isolation

The doctor who put herself into isolation died alone in her kitchen after contracting coronavirus. Doctor Isabel Munoz, 59, put herself into a strict quarantine at her home in Salamanca, north-western Spain, ordering her husband to stay away with family after she displayed symptoms. The health professional decided to lock herself away when she first suffered symptoms of COVID-19 even though she had not been tested, local media reports.

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Greece issued stark warning as coronavirus set to explode on islands: ‘Time’s up!’

For years, organisations such as the International Rescue Committee, have urged for support in rehoming the refugees who were allowed to make their way from Turkey to Greece earlier this year. And with the deadly coronavirus set to sweep through the thousands of people currently occupying destitute campsites on the Greek islands,  the EU was told “there is not much time left to resolve this issue before the cases in the area explode”. Express.co.uk has told this week how the rising number of refugees entering Greece has reached unprecedented heights with more than 45,000 people, many children, currently stuck on the islands.

Those who successfully made the trip from Turkey – after it disobeyed a pact with the EU on controlled migration to the bloc – are now forced to live in devastating, cramped conditions, which should only be occupied by around 6,000. 

The issue arose following Turkey’s reluctance to maintain the deal it struck with the EU four years ago.

The IRC says Turkey was unhappy with Brussels’ “flawed” approach to rehoming the migrants after they came to Greece and as a result abandoned the pact.

With pressure mounting on the Greek government to intervene, a government which has received millions of euros from EU member states, the IRC is now calling on the bloc to resolve this issue before an already worrying crisis deepens. 

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Imogen Sudbery, the International Rescue Committee’s Director of Policy and Advocacy, told Express.co.uk she fears the situation is currently like a “tinderbox ready to explode”.

She called on the EU and its member states to help move the refugees, especially children with relatives in the respective countries, before the coronavirus strikes.

Ms Sudbery explained that so far no cases of the infection had been found within the camps, but the number of cases in Greece is beginning to rise.

She said: “We do have a chance for these sensible measures to be put in place but of course we’re really concerned now with the explosion of coronavirus that these measures will not be taken in time.

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“We do have a window of opportunity with the asylum seekers on the islands before there has been an outbreak.

“Before they are showing symptoms they could be relocated away from the islands but there really is not much time left for it to happen before the situation explodes.”

Ms Sudbery added: “You can imagine that when we’re all familiar with the social distancing measures that we are all supposed to be taking and the sanitary measure in terms of simple things like hand-washing, that is entirely impossible to put in place inside these centres on the Greek islands.

“So we’re really looking at a tinderbox which is just ready to explode.

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“There aren’t any first confirmed cases inside the camps on the islands, though there have been among the asylum seeking population.

“But we know we have had the first confirmed case on Lesbos and there are two more suspected cases so of course we are really concerned that once this hits such overcrowded spaces with very little health provision and very, very low hand-washing facilities this could wreak absolute devastation.”

The IRC has reported a worrying trend where the attitude of locals on the idyllic islands has changed dramatically – as people’s opinion shifted from being “welcoming” to the refugees towards them realising how the situation had now become “untenable”.

This has led to further pressure on the Greek government, which has decided to make its own stance by refusing to process applications for refugees who now come to the country.

That has left many of the thousands of travellers in limbo, and what the IRC believes could explain why around 50 percent of refugees in Greece have contemplated suicide. 

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BBC Weather: Freak heatwave to end as temperatures plunge and thunderstorms thrash Europe

BBC meteorologist Chris Fawkes told viewers that an area of low pressure is bringing some wet and windy weather across most areas of Italy. He noted that the low pressure had been forming as it comes across from north Africa. The weather presenter forecast that is would bring some heavy rain and also some snow.

Mr Fawkes said: “We’ve even seen some snow down across the western side of Calabria.

“It’s down to quite low levels just for a time.

“The snowline will be rising though but there could be some further fairly heavy snow for a time at least in the Pennines during Thursday.

“At the same time, the rain is going to, by Thursday, push into parts of Greece.”

He continued: “There’ll be some thunderstorms breaking out here and the weather turning much cooler.

“It’s still very windy in Italy on Thursday, still with extensive rain around.

“We’ve got some showers across the Balearic Islands, but across much of mainland Spain and Portugal, it’s dry with some sunshine.

“It’s rather cloudy for the southeast of France, otherwise brighter with sunshine.”

The BBC presenter added: “Most of northern Europe is actually fine, settled and sunny with not a great deal of cloud around.

“The area of low pressure is weakening by this stage and pushing eastwards.

“So we’ll start to get some rain across the Balkans.”

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Mr Fawkes also told viewers: “Heavier rain will push across Greece and into western areas of Turkey as we end the week.

“Over the next few days, Madrid is looking dry with some sunshine.

“It’s quite mild for a time this weekend but it does turn more unsettled next week.

“There’ll be cloud and rain around with temperatures certainly falling quiet a bit.

“In Kyiv, it is mild over the next few days with some sunshine but turning generally a bit cloudier this weekend.”

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EU farce: MEPs could keep £298 daily allowance while working from home due to coronavirus

The institution’s top bosses will decide whether they will retain the lump sum that is meant to cover hotel bills and meals while working in either Brussels and Strasbourg. The £97,500-a-year politicians usually have to sign a pyschial register before being able to claim for their so-called “per diem”. But with the EU Parliament set to hold an emergency session today, MEPs have been warned to stay at home to curb the spread of the deadly coronavirus.

Officials have put in place plans to allow them to vote remotely on three key proposals put forward by Ursula von der Leyen’s European Commission to combat the global pandemic.

Senior MEPs on the Parliament’s top secret decision-making body will now decide on whether they should retain their lavish expenses, European sources have revealed.

According to the EU Observer website, Polish MEP Karol Karksi, from the European and Conservatives Reformist group, supports the effort to keep the “per diem” payments.

He wants the cash to cover expenses like outstanding hotel books that had been made before the coronavirus shutdown.

A source told Express.co.uk: “Some members are requesting it but the daily allowances are for people with special costs for coming to Parliament – the rules do not cover if they stay at home.”

Email votes have now been sanctioned until July 31 as part of the Parliament’s efforts to halt the spread of the deadly disease.

But Parliament President David Sassoli is said to be against MEPs retaining their expenses.

Privately, he has argued they should only be afforded the luxury payments when conducting business in either Brussels or Strasbourg, and not their homes.

MEPs are already handed lump General Expenditure Allowance of £4,147 to cover the costs off their office on top of their monthly salary of £6,321, after taxes.

Parliamentary officials have made recent exceptions to allow MEPs to keep their daily subsistence payments since the institution shut its doors.

MEPs that were forced to self-isolate, after showing symptoms or catching coronavirus, in Belgium were handed the daily fee without having to sign in.

A spokeswoman added: “For MEPs who had arrived in Brussels but were not able to go back to their home countries, they had an exception for last week when they were receiving their per diem.

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“But, as of Monday, MEPs had to come and show they are working in Parliament if they want to receive their per diem, because its linked to presence and activity.”

Catalonian separatist Carpes Puigdemont, who was recently sworn in as an MEP, has called on the Parliament to use their expenses to “obtain medical devices and equipment”.

In a letter to Mr Sassoli, he claimed £8.1 million could be donated if MEPs opted to shrink their General Expenditure Allowance by half.

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“Our offices will reduce their activity significantly. For this reason, we suggest all deputies to use the General Expenditure Allowance to obtain medical devices and equipment.

“If all MEPs would dedicate 50 percent of their GEA during the coming three months, that would represent nine million euros to acquire this really needed material.”

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Eurozone on the brink: Consumers fear Brussels won’t save economy from coronavirus crisis

The European Commission has revealed confidence levels in its single-currency bloc have plummeted as the global pandemic continues to spread like wildfire across the Continent. Brussels flash consumer confidence indicator fell a record five points to minus 11.6, its lowest since eurocrats were forced to deal with the economic ruins in 2014 left by the banking crisis. A wider measure of EU consumer confidence shows a drop of 4.5 points, back to its long-term average of minus 10.4.

Consumers fear swathes of firms will go out business and mass redundancies after the EU’s largest economies have entered lockdown to curb the spread of coronavirus.

The deadly disease has killed more than 16,500 people globally, with over half of the fatalities in Europe.

Melanie Debono, Europe economist at Capital Economics, has warned her forecasts show Eurozone unemployment could rock from 7.4 percent in January to nine percent by July.

“Households are sure to become more pessimistic in the coming months,” she said.

“Employment growth was already slowing before the crisis erupted and although governments are taking measures to keep people on the payroll, this will only limit, rather than prevent, the increase in unemployment.”

With many non-essential businesses forced to close, experts fear unemployment will once again rise after a steady decline since its peak at more than 19.3 million people during the 2013 debt crisis.

Most shockingly, German banks have experienced an unprecedented level of cash withdrawal from their ATMs as consumers prepare for an imminent financial crash.

The raft of measures implemented by Angela Merkel to halt the spread of coronavirus, could bring a hit of between 7.2 and 20.6 percent of GDP, according to a new study.

The influential Ifo think tank calculated the figures based on a partial shutdown ranging from one to three months.

Ifo president Clemens Fuest: “The costs are likely to exceed anything Germany has experienced in recent decades as a result of economic crises or natural disasters.

“The crisis will also cause massive upheaval on the job market. This could put the situation at the high point of the financial crisis into the shadows.”

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Berlin has since announced an emergency budget with huge spending plans to help limit the impact of coronavirus on the country’s economy.

The government could spend up to €750 billion, which is almost double the federal government’s previous 2020 budget, to prop up the country.

Finance minister Olaf Scholz said: “We don’t need to speculate; it’s clear there will be a negative economic impact. Anyone could say that just by looking at the empty high streets.”

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Economy minister Peter Altmaier added the expected downturn would “probably be at least as large as during the financial crisis”.

The uncertainty has prompted leading economists to clash their growth forecasts for this year.

Credit Suisse has predicted the Eurozone economy would shrink four percent this year, before not showing signs of growth in 2021.

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