• Fri. Apr 19th, 2024

EU Countries on the Brink of Economic Disaster: Risk of Lost Decade Looms

BySamantha Johnson

Mar 19, 2024
EU Countries on the Brink of Economic Disaster: Risk of Lost Decade Looms

After the eurozone crisis in 2009, Southern European economies were stuck in long recessions, with high public debt and unemployment rates. These nations experienced frequent changes in government, making it difficult to implement effective reforms to address the economic challenges. Greece, one of the hardest-hit economies, remained below its pre-crisis levels despite enduring over a decade of painful reforms.

Economists are now warning of the risks associated with the European Commission’s decision to end post-pandemic funding in 2026. This move could significantly impact countries that are reliant on this funding to continue investing in green and digital projects. With the potential cut-off of funding from Brussels, many countries with substantial debts may face economic shocks that could have widespread consequences in the political landscape.

In France and Italy, two of the eurozone’s largest economies, governing parties are feeling the pressure as upcoming elections approach. In France, the next presidential election will take place in April 2027, with current President Emmanuel Macron unable to run again. On the other hand, the Italian general election is also scheduled for the end of the same year. With far-right leader Marine Le Pen gaining support in France, and uncertainties surrounding the Italian political landscape, these countries are facing political challenges as they navigate economic uncertainties.

Currently, countries are still receiving post-pandemic cash from the European Union through various support schemes and exemptions designed to mitigate the financial impacts of the Covid-19 pandemic. The Recovery and Resilience Facility (RRF) has been crucial in providing joint debt issuance for EU countries for the first time. This dedicated fund, totaling over €700 billion, is contributing to green and digital projects. However, as this funding is set to expire at the end of 2026, countries may need to find alternative sources of support to sustain their economic recovery efforts.

By Samantha Johnson

As a content writer at newszkz.com, I delve into the realms of storytelling, blending words to paint vivid narratives that captivate and inform our readers. With a keen eye for detail and a passion for research, I craft compelling articles that resonate with our audience. My love for words drives me to explore diverse topics, ensuring that each piece I create not only educates but also entertains. Join me on this journey as we navigate the ever-evolving landscapes of news and knowledge together.

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