European economies on course for unprecedented recessions

LONDON (AP) — Europe’s economies are heading for unprecedented recessions as a result of the lockdown measures put in place by governments to get a grip on the coronavirus pandemic, closely watched surveys indicated Thursday.

The scale of the decline in business activity recorded in monthly surveys was staggering, worse even than the most pessimistic forecasts, and is likely to lend urgency to discussions of European Union leaders about a rescue support package.

“The harsh lockdown measures to slow the spread of COVID-19 have crippled economic activity across the continent,” said Florian Hense, a European economist at Berenberg Bank.

EU leaders will hold a virtual summit Thursday at which they are expected to endorse a financial aid package worth 540 billion euros ($587 billion) that would help support wages, keep companies afloat and fund health care systems.

EU institutions and nations have already mobilised around 3.3 trillion euros ($3.6 trillion).

If Thursday’s surveys are anything to go by, Europe is going to need all of that.

Financial information firm IHS Markit said its purchasing managers’ index for the eurozone — a measure of economic activity — plummeted to an all-time low of 13.5 points in April from the previous record low of 29.7 in March.

The firm has been compiling data for more than 20 years.

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