Southern Europe’s COVID-19 Crisis Is Just Beginning

Apr 13, 2020 | 10:00 GMT

A man wearing a protective mask walks in the empty square in front of a cathedral in Locri, Italy, on April 7, 2020.

A man wearing a surgical mask walks in an empty square in front of a cathedral in Locri, Italy, on April 7, 2020. As of April 10, Italy had reported 143,626 COVID-19 cases with 28,470 deaths. 



  • Southern Europe will emerge from the COVID-19 health crisis with deep recessions and high unemployment that governments will struggle to revert.
  • The stimulus measures to cope with the pandemic will lead to a significant worsening of fiscal deficits and public debt, which could trigger a debt crisis in Southern Europe if markets believe the situation is not sustainable.  
  • Governments will eventually have to introduce unpopular austerity measures to reduce their deficits, which will create a fertile ground for the emergence of anti-establishment and nationalist political forces. 

For many governments in Southern Europe, containing the COVID-19 contagion in the coming weeks may prove to be the easy part. After the immediate health crisis subsides in the region, much bigger economic and political troubles will quickly follow in the second half of the year. Countries including France, Italy, Spain, Greece and Portugal will experience deep recessions and severe fiscal problems, which in some cases will be made worse by the return of political instability and the strengthening of nationalist opposition parties. ...

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