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The lockdown currently in force in most European countries has dire economic consequences.  Sentiment indicators suggest a sharp contraction of economic activity, most heavily in southern member states and the service sector, per Rabobank.

Key quotes

“If the lockdown ends on 1 June we project a contraction of 5.2% for the Eurozone. If the lockdown is extended till 1 August, we project a contraction of 12.0%.”

“We believe that in the Eurozone as a whole unemployment will rise over the current quarters, to average 9% in 2020 as a whole, compared to 7.5% in 2019.”

“We assume that other avenues than debt mutualisation will be used to finance programmes. This may include ESM credit lines and additional room in the EU budget.”