Eurozone Economy Plunged By Record 12.1% In Second Quarter

The economy of the eurozone sank by a record 12.1% in the second quarter of 2020, compared to the first quarter, while gross domestic product for the European Union cratered by 11.9%.

(The eurozone comprises the 19 of the 27 members of the European Union that have adopted the euro as their currency)

The eurozone data came one day after the U.S. reported a 32.9% plunge in the second quarter.

Compared with the same quarter of 2019, GDP plunged by 15% in the eurozone and dropped by 14.4% in the EU.

Eurostat, the statistical office of the European Union, noted these figures were “by far the sharpest declines observed” since record-keeping started in 1995.

In the first quarter of 2020, GDP decreased by 3.6% in the eurozone and fell by 3.2% in the EU.

Among individual countries, Spain’s GDP plunged the most in the second quarter, showing an 18.5% decline. Spain was followed by Portugal (a 14.1% drop) and France (13.8%).

Lithuania exhibited the most modest decline, falling by 5.1%.

Last week, the EU agreed to an $860 billion recovery fund that is designed to help restore the bloc’s economies, with a particular emphasis on the hardest hit states in the southern regions.

"The fallout from the virus now poses a major challenge not just to the healthcare systems and the economies of the EU member states – it's also a threat to the bloc's integrity,” said las Akincilar, head of trading at the online trading platform INFINOX, according to Business Insider.

"Against all the odds, European leaders agreed a colossal … rescue fund at a marathon summit this month. That deal gave euro-watchers cause to hope, but with unemployment figures rocketing and growth stuck firmly in reverse, the single currency is coming under sustained pressure.”

Andrew Walker, BBC News' economic correspondent, wrote: “The figures are dreadful, but not a surprise. The eurozone includes some of the countries most severely affected by deaths from coronavirus. Lockdowns earlier in the pandemic were draconian and in any case, many people have been wary of exposing themselves to the risk of infection. The result was some extraordinary declines in economic activity.”