Cantillon: EU pandemic recovery lagging US and China
European bloc has track record in being last when it comes to recovering from crisis
The International Monetary Fund has warned the EU is likely to lag behind the US and China in its post-Covid-19 economic recovery.
What’s the EU’s ultimate Achilles heel? Its slowness to act. The continent’s migrant crisis played out, in often tragic fashion, for an age before Brussels reached a co-ordinated position on how to deal with the flow of refugees from the Middle East and Africa.
The financial and sovereign debt crisis a few years previously followed a similar pattern. Deadlines, missed deadlines and stalled agreements contrasted sharply with more decisive action taken in the US for instance.
Getting 27 disparate member states to agree a joint position is difficult. And now we have the International Monetary Fund (IMF) warning that the EU is likely to lag behind the US and China in its economic recovery from the pandemic.
Late and stumbling
The reasons for Europe’s lag this time don’t necessarily relate to co-ordination. The IMF highlighted the severity of lockdowns across the euro zone to contain coronavirus, as well as late and stumbling vaccination programmes.
In contrast, China will recover more quickly on account of aggressive containment measures to curb the spread of the virus, while the US, which has struggled to contain the virus, has spent more on an economic stimulus than nearly any other country.
Janet Henry, chief global economist at HSBC Holdings in London, told Bloomberg Television: “China is already back above pre-pandemic levels and, on our projections, the US will be by the end of 2021. For the euro zone, it’ll be the end of 2022.”
Stuttering immunisation programmes appear to the bloc’s most immediate problem. The EU’s best performers – Malta and Denmark – have administered only about four shots per 100 people. The US has managed seven and the UK is above 10.
With AstraZeneca pulling out of a meeting with Brussels on W ednesday to discuss Covid-19 vaccine supplies, the situation might get worse before it gets better.