• Coronavirus is spreading throughout Europe with Italy the hardest hit, reporting 15,113 cases and 1,016 deaths
  • The EU established a $41 billion Corona Response Investment Initiative to try to stem the economic damage the virus will cause
  • The European economy is expected to contract 1% in 2020

The European Union executives Friday predicted a deep recession this year in the bloc as a result of the coronavirus, forecasting a 1% contraction.

The virus has spread throughout the continent with Italy (15,113 cases and 1,016 deaths) the hardest hit, followed by Spain (4,334 cases and 122 deaths), Germany (3,156 cases and 7 deaths) and France (2,882 and 61 deaths). Worldwide, at least 136,390 cases have been confirmed with 5,089 deaths.

“The direct impact through all channels is estimated to reduce real GDP growth in 2020 by 2.5 percentage points compared to a situation where there would be no pandemic,” the European Commission said. “Given that real GDP [gross domestic product] growth was forecast to be 1.4% for the EU in 2020, this would imply it could fall to just over -1% of GDP in 2020, with a substantial but not complete rebound in 2021.”

EC President Ursula von der Leyen said the virus presents a major, unprecedented challenge to institutions, governments, health systems and economies, and called on each member state to live up to its responsibilities.

She called on member states to slow down public life to stem the spread of the virus but to keep borders open and not take unilateral action.

“We all know that the virus is not only dangerous for our health, but it is also hitting our economies. It is a major shock for the global and for the European economy,” she said. “We have to take decisive and bold action now, and this is on all different levels. This shock is temporary, but we must work together to ensure that it is as short and as limited as possible. And that it does not create permanent damage to our economies.”

She pledged 37 billion euros ($41 billion) to a Corona Response Investment Initiative to shore up health systems, help employees and support small- and medium-size businesses.

“The measures announced today deal with the situation of today. This is an important economic package. But we have to acknowledge that the situation is evolving very fast. We stand ready to do more as the situation evolves. We will do whatever is necessary to support the Europeans and the European economy,” she said.