Global Macro Service > Research Briefings > Europe

Solid initial fiscal response now needs a follow-up

As the fallout from coronavirus plunges the eurozone into recession, fiscal support will be vital to prevent the sharp downturn from causing permanent economic scars. National governments have moved relatively quickly to promise large fiscal packages, averaging 11% of GDP in the biggest European economies, with Germany going the furthest so far. While this appears sizeable, most of the support is credit guarantees, so we think much greater actual fiscal stimulus will be required.

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