Economists predict increased inequality between north and south of the EU

The southern states of the eurozone have been hit harder by the covid-19 pandemic than the countries of central and southern Europe, and the impact of such damage is likely to be unrecoverable even in the medium term. Analysts at Barclays Bank came to this conclusion after analyzing the impact of the pandemic on the eurozone economy (the analytical note is at the disposal of RBC).

Although the economic growth of Spain and other southern countries in the second half of the year promises to accelerate markedly, in the longer term, their economies will still feel less confident, Barclays believes.

“In the medium term, the rollback of unprecedented fiscal support programs is likely to expose the extent of the damage [the pandemic] has done to the private sector and the labor market. Based on our analysis, Germany will be the least susceptible to damage, while countries such as Spain or Italy, whose key industries have been severely affected by COVID-19, are at risk, ”the experts concluded.

The difference between the real GDP of Germany and France as of the first quarter of 2021 and the real GDP before the start of the pandemic was 5 percentage points and 4.5 percentage points, respectively. A similar gap in Italy is 7 percentage points, in Spain - 9.5 percentage points, according to a note by Barclays.