April 1, 2020
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Combating the coronavirus crisis costs Europe hundreds of billions of euros, according to a study by the German Ifo Institute. A two-month partial closure of companies in the UK alone causes losses of between € 193 billion and € 328 billion, according to the study published on Wednesday.
For France, the Munich researchers calculated costs between 176 and 298 billion euros, for Italy between 143 and 234 billion euros. 34 to 57 billion euros are calculated for Austria, 49 to 81 billion euros for Switzerland and 101 to 171 billion euros for Spain.
It was not only taken into account how much added value is lost if production is interrupted. In addition, the follow-up costs were estimated, which may result from bankruptcies or the loss of business relationships during the crisis.
“In addition to medical reasons, there are also economic reasons for investing heavily in health protection,” said Ifo President Clemens Fuest. “This is how the epidemic can be contained – and at the same time we could gradually lift school and company closures afterwards.” Precautions were also needed in the companies that would allow the resumption of production to be combined with a further containment of the epidemic. “If the companies remain closed for more than a month, the loss of production quickly reaches dimensions that are well beyond the slump in growth that is known from previous recessions or natural disasters in the history of the European Union,” warned Fuest.
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