This article is from the source 'nytimes' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at https://www.nytimes.com/2020/04/30/business/europe-economy-coronavirus-recession.html

The article has changed 17 times. There is an RSS feed of changes available.

Version 15 Version 16
European Slump Is Worst Since World War II, Reports Show European Slump Is Worst Since World War II, Reports Show
(8 days later)
FRANKFURT — Europe is in the midst of a downturn not seen since the end of World War II, and the worst is yet to come, Europe’s top central banker said Thursday as she painted a scenario that will test how far the continent’s political leaders are willing to go to preserve their fractured union.FRANKFURT — Europe is in the midst of a downturn not seen since the end of World War II, and the worst is yet to come, Europe’s top central banker said Thursday as she painted a scenario that will test how far the continent’s political leaders are willing to go to preserve their fractured union.
“The euro area is facing an economic contraction of a magnitude and speed that are unprecedented in peacetime,” Christine Lagarde, the president of the European Central Bank, said as she warned that the eurozone economy could shrink by as much as 12 percent this year.“The euro area is facing an economic contraction of a magnitude and speed that are unprecedented in peacetime,” Christine Lagarde, the president of the European Central Bank, said as she warned that the eurozone economy could shrink by as much as 12 percent this year.
In a bid to prevent another financial crisis that would generate years of economic woe, the bank’s Governing Council decided Thursday to effectively pay banks to lend money and vowed to do whatever was necessary to counteract the economic impact of the coronavirus pandemic.In a bid to prevent another financial crisis that would generate years of economic woe, the bank’s Governing Council decided Thursday to effectively pay banks to lend money and vowed to do whatever was necessary to counteract the economic impact of the coronavirus pandemic.
But many economists and government leaders agree that despite the central bank’s display of monetary firepower, which could pump more than $4 trillion into the economy, it will not be enough to guarantee the survival of the eurozone without help from governments.But many economists and government leaders agree that despite the central bank’s display of monetary firepower, which could pump more than $4 trillion into the economy, it will not be enough to guarantee the survival of the eurozone without help from governments.
“Europe is experiencing an economic shock without precedent in modern times,” said Paolo Gentiloni, the European commissioner for the economy and a former Italian prime minister. “This is why we need a recovery plan that is sufficiently large, targeted at the hardest-hit economies and sectors, and deployable in the coming months.”“Europe is experiencing an economic shock without precedent in modern times,” said Paolo Gentiloni, the European commissioner for the economy and a former Italian prime minister. “This is why we need a recovery plan that is sufficiently large, targeted at the hardest-hit economies and sectors, and deployable in the coming months.”
“If not now, when?” he added.“If not now, when?” he added.
Ms. Lagarde urged European leaders to go beyond the relatively modest sums they have already pledged and “to work towards establishing a recovery fund dedicated to dealing with this unprecedented crisis.”Ms. Lagarde urged European leaders to go beyond the relatively modest sums they have already pledged and “to work towards establishing a recovery fund dedicated to dealing with this unprecedented crisis.”
Her stark assessment of the economic impact of the coronavirus crisis came after the European Union’s statistics agency estimated that economic output in the eurozone fell 3.8 percent in the first three months of the year, the region’s worst performance since the common currency was introduced in 1999.Her stark assessment of the economic impact of the coronavirus crisis came after the European Union’s statistics agency estimated that economic output in the eurozone fell 3.8 percent in the first three months of the year, the region’s worst performance since the common currency was introduced in 1999.
The French economy declined by 5.8 percent, Spain’s by 5.2 percent and Italy’s by 4.7 percent, their steepest downturns in the postwar period.The French economy declined by 5.8 percent, Spain’s by 5.2 percent and Italy’s by 4.7 percent, their steepest downturns in the postwar period.
But divided European Union leaders have struggled to assemble the type of enormous stimulus plan urged by Mr. Gentiloni and others.But divided European Union leaders have struggled to assemble the type of enormous stimulus plan urged by Mr. Gentiloni and others.
The leaders in Brussels have not been able to agree on what would have been the most ambitious response to the crisis, issuing common debt that would be guaranteed by all countries. They instead have settled on policies that will support unemployed workers, small businesses and health care systems with 540 billion euros, or $590 billion, an underwhelming sum considering the scale of the recession ahead.The leaders in Brussels have not been able to agree on what would have been the most ambitious response to the crisis, issuing common debt that would be guaranteed by all countries. They instead have settled on policies that will support unemployed workers, small businesses and health care systems with 540 billion euros, or $590 billion, an underwhelming sum considering the scale of the recession ahead.
Italy and Spain, both hard hit by the virus, have been leading a bloc of weaker European countries that are demanding a fund worth at least €1.5 trillion to help the region recover.Italy and Spain, both hard hit by the virus, have been leading a bloc of weaker European countries that are demanding a fund worth at least €1.5 trillion to help the region recover.
But European Union leaders have fallen back into familiar camps. Germany, the Netherlands and other wealthier northern countries have insisted that the poorer countries in the south finance their own recoveries — ignoring, critics say, the degree to which their economic fates are intertwined.But European Union leaders have fallen back into familiar camps. Germany, the Netherlands and other wealthier northern countries have insisted that the poorer countries in the south finance their own recoveries — ignoring, critics say, the degree to which their economic fates are intertwined.
Italy is a major supplier of parts for German cars, but its heavy debt load could provoke a financial crisis that would be devastating for the continent. The burden of dealing with the coronavirus is expected to push Italy’s government borrowing above 150 percent of gross domestic product, a perilously high level. If investors lose faith in Italy’s ability to service its debt and dump Italian bonds, German banks will be among those hit hard.Italy is a major supplier of parts for German cars, but its heavy debt load could provoke a financial crisis that would be devastating for the continent. The burden of dealing with the coronavirus is expected to push Italy’s government borrowing above 150 percent of gross domestic product, a perilously high level. If investors lose faith in Italy’s ability to service its debt and dump Italian bonds, German banks will be among those hit hard.
As was the case during the last eurozone crisis, which ended only five years ago, the central bank would be left to pick up the pieces as best it could.As was the case during the last eurozone crisis, which ended only five years ago, the central bank would be left to pick up the pieces as best it could.
“If, as we expect, the countries do not come to an agreement in the foreseeable future,” Jörg Krämer, the chief economist at Commerzbank, said in a note to clients, “pressure will quickly mount again on the bond markets, which should prompt the E.C.B. to step in.”“If, as we expect, the countries do not come to an agreement in the foreseeable future,” Jörg Krämer, the chief economist at Commerzbank, said in a note to clients, “pressure will quickly mount again on the bond markets, which should prompt the E.C.B. to step in.”
The central bank did not change any of its official interest rates Thursday, but in effect it lowered its main lending rate below zero.The central bank did not change any of its official interest rates Thursday, but in effect it lowered its main lending rate below zero.
Under certain conditions, the central bank will allow commercial banks in the eurozone to borrow at a rate of minus 1 percent provided the money is passed on to businesses and consumers. And under a program with fewer strings attached, banks will be able to borrow as much as they want from the central bank at a negative rate of 0.25 percent.Under certain conditions, the central bank will allow commercial banks in the eurozone to borrow at a rate of minus 1 percent provided the money is passed on to businesses and consumers. And under a program with fewer strings attached, banks will be able to borrow as much as they want from the central bank at a negative rate of 0.25 percent.
The negative interest rates mean that banks could borrow up to €3 trillion, or $3.3 trillion, without having to pay all of the money back.The negative interest rates mean that banks could borrow up to €3 trillion, or $3.3 trillion, without having to pay all of the money back.
Updated July 7, 2020
The coronavirus can stay aloft for hours in tiny droplets in stagnant air, infecting people as they inhale, mounting scientific evidence suggests. This risk is highest in crowded indoor spaces with poor ventilation, and may help explain super-spreading events reported in meatpacking plants, churches and restaurants. It’s unclear how often the virus is spread via these tiny droplets, or aerosols, compared with larger droplets that are expelled when a sick person coughs or sneezes, or transmitted through contact with contaminated surfaces, said Linsey Marr, an aerosol expert at Virginia Tech. Aerosols are released even when a person without symptoms exhales, talks or sings, according to Dr. Marr and more than 200 other experts, who have outlined the evidence in an open letter to the World Health Organization.
Common symptoms include fever, a dry cough, fatigue and difficulty breathing or shortness of breath. Some of these symptoms overlap with those of the flu, making detection difficult, but runny noses and stuffy sinuses are less common. The C.D.C. has also added chills, muscle pain, sore throat, headache and a new loss of the sense of taste or smell as symptoms to look out for. Most people fall ill five to seven days after exposure, but symptoms may appear in as few as two days or as many as 14 days.
Scientists around the country have tried to identify everyday materials that do a good job of filtering microscopic particles. In recent tests, HEPA furnace filters scored high, as did vacuum cleaner bags, fabric similar to flannel pajamas and those of 600-count pillowcases. Other materials tested included layered coffee filters and scarves and bandannas. These scored lower, but still captured a small percentage of particles.
A commentary published this month on the website of the British Journal of Sports Medicine points out that covering your face during exercise “comes with issues of potential breathing restriction and discomfort” and requires “balancing benefits versus possible adverse events.” Masks do alter exercise, says Cedric X. Bryant, the president and chief science officer of the American Council on Exercise, a nonprofit organization that funds exercise research and certifies fitness professionals. “In my personal experience,” he says, “heart rates are higher at the same relative intensity when you wear a mask.” Some people also could experience lightheadedness during familiar workouts while masked, says Len Kravitz, a professor of exercise science at the University of New Mexico.
The steroid, dexamethasone, is the first treatment shown to reduce mortality in severely ill patients, according to scientists in Britain. The drug appears to reduce inflammation caused by the immune system, protecting the tissues. In the study, dexamethasone reduced deaths of patients on ventilators by one-third, and deaths of patients on oxygen by one-fifth.
The coronavirus emergency relief package gives many American workers paid leave if they need to take time off because of the virus. It gives qualified workers two weeks of paid sick leave if they are ill, quarantined or seeking diagnosis or preventive care for coronavirus, or if they are caring for sick family members. It gives 12 weeks of paid leave to people caring for children whose schools are closed or whose child care provider is unavailable because of the coronavirus. It is the first time the United States has had widespread federally mandated paid leave, and includes people who don’t typically get such benefits, like part-time and gig economy workers. But the measure excludes at least half of private-sector workers, including those at the country’s largest employers, and gives small employers significant leeway to deny leave.
So far, the evidence seems to show it does. A widely cited paper published in April suggests that people are most infectious about two days before the onset of coronavirus symptoms and estimated that 44 percent of new infections were a result of transmission from people who were not yet showing symptoms. Recently, a top expert at the World Health Organization stated that transmission of the coronavirus by people who did not have symptoms was “very rare,” but she later walked back that statement.
Touching contaminated objects and then infecting ourselves with the germs is not typically how the virus spreads. But it can happen. A number of studies of flu, rhinovirus, coronavirus and other microbes have shown that respiratory illnesses, including the new coronavirus, can spread by touching contaminated surfaces, particularly in places like day care centers, offices and hospitals. But a long chain of events has to happen for the disease to spread that way. The best way to protect yourself from coronavirus — whether it’s surface transmission or close human contact — is still social distancing, washing your hands, not touching your face and wearing masks.
A study by European scientists is the first to document a strong statistical link between genetic variations and Covid-19, the illness caused by the coronavirus. Having Type A blood was linked to a 50 percent increase in the likelihood that a patient would need to get oxygen or to go on a ventilator, according to the new study.
If air travel is unavoidable, there are some steps you can take to protect yourself. Most important: Wash your hands often, and stop touching your face. If possible, choose a window seat. A study from Emory University found that during flu season, the safest place to sit on a plane is by a window, as people sitting in window seats had less contact with potentially sick people. Disinfect hard surfaces. When you get to your seat and your hands are clean, use disinfecting wipes to clean the hard surfaces at your seat like the head and arm rest, the seatbelt buckle, the remote, screen, seat back pocket and the tray table. If the seat is hard and nonporous or leather or pleather, you can wipe that down, too. (Using wipes on upholstered seats could lead to a wet seat and spreading of germs rather than killing them.)
If you’ve been exposed to the coronavirus or think you have, and have a fever or symptoms like a cough or difficulty breathing, call a doctor. They should give you advice on whether you should be tested, how to get tested, and how to seek medical treatment without potentially infecting or exposing others.
The central bank also said it was prepared to further increase its purchases of government and corporate bonds, a form of money printing intended to keep market interest rates low and make it easier for businesses and consumers to get credit.The central bank also said it was prepared to further increase its purchases of government and corporate bonds, a form of money printing intended to keep market interest rates low and make it easier for businesses and consumers to get credit.
The central bank had previously earmarked more than €1 trillion, or $1.1 trillion, for asset purchases. But the bank said Thursday that it was prepared to raise that sum “as much as necessary and for as long as needed.”The central bank had previously earmarked more than €1 trillion, or $1.1 trillion, for asset purchases. But the bank said Thursday that it was prepared to raise that sum “as much as necessary and for as long as needed.”
“We are fully flexible, and we will look at all options,” Ms. Lagarde said.“We are fully flexible, and we will look at all options,” Ms. Lagarde said.
As bad as the data published Thursday looked, the current quarter could be even worse. Lockdowns did not begin until March, near the end of the three-month period covered by the report. Ms. Lagarde said eurozone output could decline by 15 percent in the second quarter.As bad as the data published Thursday looked, the current quarter could be even worse. Lockdowns did not begin until March, near the end of the three-month period covered by the report. Ms. Lagarde said eurozone output could decline by 15 percent in the second quarter.
“Sectors of the economy are simply shut down,” she said.“Sectors of the economy are simply shut down,” she said.
The economy is expected to rebound later in the year, Ms. Lagarde said, but the total decline for 2020 will be at least 5 percent and as much as 12 percent.The economy is expected to rebound later in the year, Ms. Lagarde said, but the total decline for 2020 will be at least 5 percent and as much as 12 percent.
Official data published Thursday is only beginning to reveal the scale of the damage caused by shutdowns to prevent the spread of coronavirus.Official data published Thursday is only beginning to reveal the scale of the damage caused by shutdowns to prevent the spread of coronavirus.
Unemployment in the eurozone rose modestly in March, to 7.4 percent from 7.3 percent in February, interrupting a jobs recovery that had been underway since the low point of the eurozone debt crisis in 2013.Unemployment in the eurozone rose modestly in March, to 7.4 percent from 7.3 percent in February, interrupting a jobs recovery that had been underway since the low point of the eurozone debt crisis in 2013.
In France, Germany and many other countries, millions of employees are on government-subsidized furloughs and do not count as unemployed. Germany’s unemployment rate rose to 5.8 percent from 5.1 percent in March. Although 2.6 million Germans are officially unemployed, more than 10 million are furloughed.In France, Germany and many other countries, millions of employees are on government-subsidized furloughs and do not count as unemployed. Germany’s unemployment rate rose to 5.8 percent from 5.1 percent in March. Although 2.6 million Germans are officially unemployed, more than 10 million are furloughed.
The jobless rate is almost certain to rise further as airlines, carmakers and other large corporations begin to lay off workers in reaction to plunging sales.The jobless rate is almost certain to rise further as airlines, carmakers and other large corporations begin to lay off workers in reaction to plunging sales.
Inflation in the eurozone, another indicator of distress, fell to an annualized rate of 0.4 percent in April from 0.7 percent in March as oil prices plunged. The rate is the lowest since 2016. However, prices for food, alcohol and tobacco surged.Inflation in the eurozone, another indicator of distress, fell to an annualized rate of 0.4 percent in April from 0.7 percent in March as oil prices plunged. The rate is the lowest since 2016. However, prices for food, alcohol and tobacco surged.
Ms. Lagarde declined to speculate on whether the eurozone was in danger of slipping into deflation, a ruinous downward spiral of prices and demand.Ms. Lagarde declined to speculate on whether the eurozone was in danger of slipping into deflation, a ruinous downward spiral of prices and demand.