Fabio Panetta, a member of the Management Board of the European Central Bank, believes that the institution should maintain its support for the economy.
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One by one, the economic recovery signals in Europe saw orange or even red. While the rebound was hitherto very fast, the bock comes from three fronts: the bottlenecks in logistics chains, inflation snacking the purchasing power and, above all, a new pandemic wave with the return Sanitary restrictions, particularly in Austria, Germany, Belgium, the Netherlands and Greece.
The slowdown is sufficiently net for growth in the euro zone to be almost zero in the fourth quarter, according to Andrew Kenningham, Capital Economics Cabinet: “The worsening of the situation of COVID in Germany means that the country could be subject to much stronger restrictions, potentially reducing 0.25% gross domestic product [GDP] of the fourth quarter in the euro zone. Although other countries impose less draconian rules, consumer prudence could cause a stagnation of the in the fourth quarter. “
Since Monday, November 22, Austria has set up a twenty-day confinement. Greece now prohibits closed public places (bars, restaurants, gym) to unvaccinated people. In the Netherlands, a sanitary pass is again necessary.
Disorganization of supply chains
From a strictly economic point of view, it is mainly the situation of Germany who worries, since it represents 21% of the GDP of the euro area. New restrictions are likely. “We are in a highly dramatic situation, explained Monday the outgoing Chancellor Angela Merkel. What is in place is not enough.”
These new restrictions occur at a time when the economy was already beginning to know a few failure. On the Rhine, the IFO index, which measures the morale of companies, declined in November for the fifth month in a row from 97.7 to 96.5 points. This fall is all the more worrying as the business survey was made before the rebound of COVID-19, mainly during the first part of the month.
“The risks of a decline in economic activity seem to multiply”, warned Wednesday Fabio Panetta, member of the Management Board of the European Central Bank (ECB), during a speech in Paris, evoking the disorganization of the chains supply. “It could soon be seen in GDP growth,” he judges.
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