ASSESSMENTS

Will COVID-19 Be the Eurozone’s Undoing?

MIN READMay 27, 2020 | 16:31 GMT

A statue depicting the euro is pictured outside the headquarters of the European Central Bank, which serves as the central bank of the 19 EU countries within the eurozone, in Frankfurt, Germany.

(Shutterstock/Yavuz Meyveci)

COVID-19 will saddle the eurozone with financial and political risks for years to come, testing the economic and institutional resilience of the currency area. High debt and deficit levels will increase the probability of sovereign defaults, especially in Southern Europe, as high unemployment levels create fertile ground for social unrest and the resurgence of destabilizing nationalist and anti-establishment political parties across the Continent. ...

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