Uncertainty in the Euro Zone Continues

Uncertainty in the Euro Zone Continues Uncertainty in the Euro zone continues. The European Central Bank (ECB) published a report on economic and financial developments in the eurozone. In the report, it was stated that despite efforts to compensate for the losses caused by the Coronavirus (Covid-19) epidemic, uncertainty in the region continues. The effects of the coronavirus, which started in China and spread rapidly to the world and caused financial difficulties as well as loss of life, continue. With the restriction decisions taken in order to prevent the spread of the epidemic, economic activities were suspended, economies that suffered heavy losses during the recession period continued their activities with the decrease in the number of cases with the start of support packages and compensation efforts. According to the report of AMP; In the second quarter, when the epidemic was most effective, the real gross domestic product (GDP) of the Eurozone shrank by 11.8 percent compared to the first quarter. In the report, which stated that the uncertainty regarding the course of the epidemic prevented the economic recovery, “Uncertainty regarding the evolution of the epidemic will likely reduce the strength of the recovery in the labor market, consumption and investment. The eurozone economy should be supported by favorable financing conditions, expansionary fiscal stance and strengthening global activity and demand.”   "The coronavirus pandemic continues to be the main source of uncertainty for the global economy." Referring to the fact that the economic recovery is in parallel with the success in combating the epidemic, it was emphasized that it remains uncertain how long the epidemic will last. Emphasizing to the effects of political developments on the economy as well as the epidemic, possible risks were listed in the report. In the list; Brexit, the increase of nationalism and the disruptions in the supply chain were mentioned. In the report, which also mentioned that the employment losses that occurred due to the decrease in demand continued in the third quarter, it was stated that the economic activities were very low compared to the pre-epidemic and that the decision to keep the interest fixed was taken accordingly at the meeting on September 10.